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THE 


Ontario  Law  Reports. 


CASES  DETERMINED  IN  THE  COURT  OF  APPEAL 
AND  IN  THE  HIGH  COURT  OF  JUSTICE 
FOR  ONTARIO. 

1912. 


REPORTED  UNDER  THE  AUTHORITY  OF  THE 

LAW  SOCIETY  OF  UPPER  CANADA 


VOL.  XXVI. 


EDITOR : 

EDWARD  B.  BROWN,  K.C. 


TORONTO : 

CANADA  LAW  BOOK  COMPANY,  Limited, 
Law  Book  Publishers 
32-34  Toronto  St. 


1912 


Copyright,  Canada,  1912,  by  the  Law  Society  of  Upper  Canada. 


JUDGES 


OF  THE 

COURT  OF  APPEAL 

DURING  THE  PERIOD  OF  THESE  REPORTS.  • 


The  Hon.  Sir  Charles  Moss,  C.J.O. 

“ “ James  Thompson  G arrow,  J.A. 

“ “ John  James  Maclaren,  J.A. 

“ “ Richard  Martin  Meredith,  J.A. 

“ “ James  Magee,  J.A. 


JUDGES 


OF  THE 

HIGH  COURT  OF  JUSTICE 

DURING  THE  PERIOD  OF  THESE  REPORTS. 


King’s  Bench  Division. 

The  Hon.  Sir  Glenholme  Falconbridge,  C.J.K.B. 
“ “ Byron  Moffatt  Britton,  J. 

“ “ William  Renwick  Riddell,  J. 


Chancery  Division. 

The  Hon.  Sir  John  Alexander  Boyd,  C.,  K.C.M.G. 
“ “ Francis  Robert  Latchford,  J. 

“ “ William  Edward  Middleton,  J. 


Common  Pleas  Division. 

The  Hon.  Sir  William  Ralph  Meredith,  C.J.C.P. 
“ “ James  Yernall  Teetzel,  J. 

“ “ Hugh  Thomas  Kelly,  J. 

Exchequer  Division. 


The  Hon. 

u a 
u u 


Sir  William  Mulock,  C.J.Ex.D.,  K.C.M.G. 
Roger  Conger  Clute;  J. 

Robert  Franklin  Sutherland,  J. 


Unattached. 

The  Hon.  Haughton  Lennox,  J. 


MEMORANDA 


The  Honourable  Sir  Charles  Moss,  Chief  Justice  of  Ontario, 
died  at  Toronto  on  the  11th  October,  1912. 


In  Hilary  Term,  1912,  the  following  gentlemen  were  called  to 
the  Bar: — 

James  Miles  Langstaff  (with  honours,  gold  medal,  and 
Chancellor  Yan  Koughnet  Scholarship). 

Archibald  Cochrane. 

Bernard  Collins. 

William  George  Jackson  (with  honours). 

Montalieu  Nesbitt. 

LeRoy  Eaton  Awrey. 

Welbern  Graham  Atkin. 

John  Boyd  Hopkins. 

Philip  Grattan  Kiely. 

Daniel  Western  O’Sullivan. 

Thomas  Hamilton  Simpson. 

Charles  Watson  Widdifield. 

Yernon  Joseph  C allen. 

William  Cedric  Davidson. 

George  Reece  Kappele. 

George  Keogh. 

Hedley  Clark  Macklem. 

George  Francis  Rooney. 

Stanley  Howard  Slater. 

Hyacinthe  Reinhold  Yalin. 

Francis  James  Foley. 

William  Yincent  Carey. 

Norman  Baillie  Worm  with. 

John  Charles  McKay  MacBeth. 


VIII 


MEMORANDA. 


James  Henry  Oldham. 

Herbert  Bethune  Daw. 

Alexander  Murray  Garden. 
Arthur  Burgess  Turner. 

John  Hylton  Cavell. 

John  Cowan  Jr. 

Hugh  Percival  Adams  Edge. 
Maurice  James  Folinsbee. 

Howard  Kilbourne  Harris. 

Hugh  Leonard  O’Rourke. 

Edgar  Fraser  Raney. 

Ephraim  Frederick  Singer. 

John  Richard  Oorkery. 

Harry  VanWyck  Laughton. 
Clarence  Lorne  Fraser. 

George  Gilbert  Thrasher. 

William  Joseph  Goodwin. 

■Edgar  Rodolphe  Eugene  Cpievrier. 
Samuel  Max  Mehr. 

Henri  Gustave  Smith. 


ERRATA 


Page  163,  2nd  line  of  head-note,  for  “general”  read  “funeral.” 

“ 419,  11th  line  from  the  bottom,  the  last  word  on  the  line  should  be 

“senior” — not  “junior.” 


CASES  REPORTED. 


A. 


Adams  v.  Gourlay 
Allen,  Scott  v.  . . . 

...(D.C.) 

Anglo-Canadian 

Mortgage 

Corporation,  Powell-Rees 

Limited  v 

. . . (Chrs.) 

Auger,  Re 

...(D.C.) 

B. 

Bailey,  Beatty  v. . 

...(D.C.) 

Bank  of  Montreal,  Freeman 
v 

Beatty  v.  Bailey (D.C.) 

Bethune  v.  The  King 

Blyth,  Village  of,  and  Town- 
ship of  McKillop,  Re.  . . . 

(C.A.) 

Britnell,  Rex  v (C.A.) 

Brussels,  Village  of,  and  Mc- 
Killop Municipal  Tele- 
phone System,  Re... (C.A.) 

Buchner,  Fidelity  Trust  Co. 
v 

C. 

Cameron,  Rudd  v.  . ..(D.C.) 

Campbell,  Jarrett  v. . (Chrs.) 

Canadian  Pacific  R.W.  Co., 
Pattison  v (C.A.) 

Canadian  Pacific  R.W.  Co., 
Stone  v (C.A.) 

Canadian  Railway  Accident 
Insurance  Co.,  Wadsworth 
v (D.C.) 

Canadian  Shipbuilding  Co., 
Re 

Carson,  Sibbitt  v 

Carter,  Young  v 

Clark  v.  Loftus (C.A.) 

Cohen,  Rex  v (C.A.) 

Constantine au  and  Jones,  Re 
(Chrs.) 

Cox,  Underwood  v. . . (D.C.) 

Crowe,  Maloughney  v 


D. 

Denton,  Re (D.C.)  294 

Dinnick  and  McCallum,  Re 
(D.C.)  551 

E. 

Employers’  Liability  Assur- 
ance Corporation,  Wallace 
v (C.A.)  10 

F. 

Fidelity  Trust  Co.  v.  Buch- 
ner   367 

Fraser,  Re (C.A.)  508 

Fraser,  McCormick  v.(C.A.)  508 
Fraser  v.  Robertson.  .(C.A.)  508 
Freeman  v.  Bank  of  Mont- 
real  451 

Fremont  v.  Fremont. . (D.C.)  6 

G. 

Galbraith,  Rice  v (D.C.)  43 

Gourlay*  Adams  v 87 

Grand  Trunk  R.W.  Co., 

Robinson  v 437 

Grand  Valley  R.W.  Co., 
Wood  v 441 

H. 

Hamlink,  Re  Rex  v. . . (D.C.)  381 

Honan,  Rex  v (C.A.)  484 

Huegli  v.  Pauli 94 

Hunter  v.  Richards . . (D.C.)  458 

Hutchinson,  Re (Chrs.)  113 

Hutchinson,  Re (D.C.)  601 

I. 

Imperial  Paper  Mills  of 
Canada  Limited  v.  Quebec 
Bank (C.A.)  637 


87 

571 

490 

404 

145 

451 

145 

117 

29 

136 

29' 

367 

154 

83 

410 

121 

55 

564 

585 

576 

204 

497 

160 

303 

579 


Xll 


CASES  REPORTED. 


[VOL. 


J. 

Jardine,  Perryman  v. . (D.C.)  323 
Jardine,  Pukulski  v..(D.C.)  323 
Jarrett  v.  Campbell . . (Chrs.)  83 
Jones,  Re  Constantineau  and 
(Chrs.)  160 

K. 

Kennedy  v.  Kennedy 105 

Kerley  v.  London  and  Lake 
Erie  Transportation  Co. . . 588 
Kuula  v.  Moose  Mountain 
Limited (Chrs.)  332 

L. 

Livingston  v.  Livingston . . . 246 

Loftus,  Clark  v (C.A.)  204 

London  and  Lake  Erie 
Transportation  Co.,  Ker- 
ley v 588 

London  Guarantee  and  Acci- 
dent Co.,  Youlden  v 75 

M. 

McCallum,  Re  Dinnick  and 

(D.C,)  551 

McCormick  v.  Fraser.  (C.A.)  508! 

McGill  Chair  Co.,  Re 254  j 

McKillop  Municipal  Tele- 
phone System,  Re  Village 
of  Brussels  and ....  (C.A.)  29 

McKillop,  Township  of,  Re 

Village  of  Blyth  and 

(C.A.)  29 

MacMahon  v.  Railway  Pas- 
sengers Assurance  Co.  . . . 

(Chrs.)  430 

McMulkin  v.  Traders  Bank 

of  Canada (D.C.)  1 

Maloughney  v.  Crowe 579 

Matthew  Guy  Carriage  and 

Automobile  Co.,  Re 377 

Maybury  v.  O’Brien. (C.A.)  628 
Malancthon  Board  of 

Health,  Rich  v (D.C.)  48 

Mercer,  Re 427 


Merchants  Bank  of  Canada 

v.  Thompson (C.A.)  183 

Moose  Mountain  Limited, 

Kuula  v (Chrs.)  332 

Morton,  Rex  ex  rel.,  v. 

Roberts (Chrs.)  263 

Morton,  Rex  ex  rel.,  v. 

Rymal (Chrs.)  263 

Mountain,  Re (C.A.)  163 

Munro’s  Case 254 

N. 

National  Trust  Co.  v.  Trusts 

and  Guarantee  Co 279 

Northern  Crown  Bank, 
Townsend  v 291 

O. 

O’Brien,  Maybury  v. . (C.A.)  628 

P. 

Pattison  v.  Canadian  Pacific 

R.W.  Co (C.A.)  410 

Pauli,  Iiuegli  v 94 

Perryman  v.  Jardine.  .(D.C.)  323 
Playfair,  Thomson  v. . (C.A.)  624 
Powell-Rees  Limited  v. 
Anglo-American  Mortgage 

Corporation (Chrs.)  490 

Pukulski  v.  Jardine.  .(D.C.)  323 

Q. 

Quebec  Bank,  Imperial 
Paper  Mills  of  Canada 
Limited  v (C.A.)  637 

R. 

Railway  Passengers  Assur- 
ance Co.,  MacMahon  v. 


(Chrs.)  430 

Rex,  Bethune  v 117 

Rex  v.  Britnell (C.A.)  136 

Rex  v.  Cohen..* (C.A.)  497 

Rex  v.  Hamlink,  Re.  . (D.C.)  381 

Rex  v.  Honan (C.A.)  484 

Rex  v.  Sovereen (C.A.)  16 


XXVI.]  CASES  REPORTED.  Xlii 


Rex  ex  rel.  Morton  v.  Ro- 
berts  (Chrs.)  263 

Rex  ex  rel.  Morton  v.  Ry- 

mal (Chrs.)  263 

Rice  v.  Galbraith. . . . (D.C.)  43 

Rich  v.  Melancthon  Board 

of  Health (D.C.)  48 

Richards,  Hunter  v.  . (D.C.)  458 
Roberts,  Rex  ex  rel.  Morton 

v (Chrs.)  263 

Robertson,  Fraser  v. . (C.A.)  508 
Robinson  v.  Grand  Trunk  R. 

W.  Co 437 

Rudd  v.  Cameron (D.C.)  154 

Rymal,  Rex  ex  rel.  Morton 
v (Chrs.)  263 

S. 

Sanderson  and  Saville,  Re . . 

(D.C.)  616 

Scott  v.  Allen (D.C.)  571 

Sibbitt  v.  Carson 585 

Sovereen,  Rex  v (C.A.)  16 

Sproat,  Zimmerman  v 448 

Stone  v.  Canadian  Pacific  R. 

W.  Co (C.A.)  121 

T. 

Thompson,  Merchants  Bank 

of  Canada  v (C.A.)  183 

Thomson  v.  Playfair . (C.A.)  624 
Toronto,  City  of,  and  Tor- 
onto R.W.  Co.,  Re. (C.A.)  225 


Townsend  v.  Northern 

Crown  Bank 291 

Traders  Bank  of  Canada, 

McMulkin  v (D.C.)  1 

Trusts  and  Guarantee  Co., 
National  Trust  Co.  v.  . . . 279 

U. 

Underwood  v.  Cox. . . (D.C.)  303 

W. 

Wadsworth  v.  Canadian 
Railway  Accident  Insur- 
ance Co (D.C.)  55 

Wallace  v.  Employers’  Lia- 
bility Assurance  Corpora- 
tion  (C.A.)  10 

Wentworth,  County  of,  v. 
Township  of  West  Flam- 

borough  (C.A.)  199 

West  Lome  Scrutiny,  Re . . . 

(C.A.)  339 

Wood  v.  Grand  Valley  R.W. 

Co 441 

Y. 

Youlden  v.  London  Guar- 
antee and  Accident  Co. . . 75 

Young  v.  Carter 576 

Z. 


Zimmerman  v.  Sproat 


448 


CASES  CITED 


A, 

Name  of  Case. 

Aas  v.  Benham 

Accident  Insurance  Co.  v.  Crandal.  . . 

Adams  v.  McBeath 

Adamson  v.  Armitage 

yEtna  Life  Insurance  Co.  v.  Vandecar.  ; 
Agricultural  Savings  and  Loan  Co.  v. 
Liverpool  and  London  and  Globe 

Insurance  Co 

Aikins  v.  Blain 

Alderson  v.  Maddison 

Aldin  v.  Latimer  Clark  Muirhead  & 

Co, 

Allan  v.  Clarkson 

Allcord  v.  Skinner 

Allen  v.  Wentzell 

Allison  v.  McDonald 

Almada  and  Tirito  Co.,  In  re 

Amos  v.  Chadwick 

Amys  v.  Barton 

Anable  v.  Fidelity  and  Casualty  Co. 

of  N.Y 

Ancient  Order  of  United  Workmen  of 

Quebec  v.  Turner 

Andrews;  Re 

Andrews  v.  Calori 

Angus  v.  Dalton 

Anon 

Argles,  Re 

Arkwright,  Ex  p 

Askew  v.  Manning 

Astley  v.  Earl  of  Essex 

Atcheson  v.  Grand  Trunk  R.W.  Co. . . 
Athenaeum  Life  Assurance  Society  v. 

Pooley 

Atkinson  v.  Casserley 

Atkyns  v.  Pearce 

Attorney-General  v.  Acton  Local 

Board 

Attorney-General  v.  Bishop  of  Chester 

Attorney-General  v.  Gaskill 

Attorney-General  v.  Hamilton  Street 

R.W.  Co 

Attorney-General  v.  Harrison 

Attorney-General  v.  North  Metropol- 
itan Tramways  Co 

Attorney-General  v.  Read 

Attorney-General  for  Ontario  v.  Ham- 
ilton Street  R.W.  Co 

Attorney-General  for  Ontario  v. 

Woodruff 

Atwood  v.  Atwood.  . 

Atwood  v.  Crowdie 

Avril  v.  Mordant 

Ayers  v.  South  Australian  Banking 
Co 


Where  Reported.  Page. 

[1891]  2 Ch.  244,  255 246,  249 

120U.S.  527 70 

27  S.C.R.  13 206 

19  Yes.  416 177 

86  Fed.  Repr.  282 10 

3 0.L.R.  127 80 

13  Gr.  646 450 

7 Q.B.D.  174 625 

[1894]  2 Ch.  437  478 

17  Gr.  570  653 

36  Ch.D.  145 309 

7 E.L.R.  575  207 

20  A.R.  695 147 

38  Ch.D.  415 258 

4 Ch.D.  869 337 

[1911]  W.N.  205 79 

63Atl.Repr.92,  74N.J.L.686.  .10,  13 

44  S.C.R.  145 374 

2 A.R.  24 569 

38  S.C.R.  588 630 

3 Q.B.D.  85,  4 Q.B.D.  162.  . .470,  471 

6 Gr.  632 371 

10O.W.R.  801 602 

3 Mont.  D.&  DeG.  129  450 

38U.C.R.  345 271 

L.R.  18  Eq.  290 93 

1 O.L.R.  168.  . 125 

3 De  G.  & J.  294 650 

22  O.L.R.  527 252 

26  L.J.C.P.  252 572 

22  Ch.D.  221 474 

1 Bro.  C.C.  444 176 

20  Ch.D.  519,  528 432 

24  A.R.  170 590 

12  Gr.  466 472 

[1892]  3 Ch.  70 494 

2 Mod.  299 275 

[1903]  A.C.  524 590 

15  O.L.R.  416,  [1908]  A.C.  508. . . 4 

15  P.R.  425,  16  P.R.  50 6,  7,  9 

1 Stark.  483 183,  184,  194,  197 

3 L.J.N.S.K.B.  148  325 

L.R.  3 P.C.  548 649 


XY1 


CASES  CITED. 


[VOL. 


B. 


Name  of  Case. 


Where  Reported. 


Page. 


Bacon  v.  Proctor T.  & R.  31 181 

Baker  v.  Baker 6 H.L.C.  616 120 

Baker  v.  Dawbarn 19  Gr.  113 407 

Ball  v.  Parker 39  U.C.R.  488 572,  575 

Bank  of  Toronto  v.  Perkins 8 S.C.R.  603 650 

Barraclough  v.  Cooper [1905]  2 Ch.  121  ( n ) 300 

Barrett,  Re 5 A.  R.  206 569 

Barry  v.  Barry 1 Molloy  210 372 

Barry  v.  Barry [1901]  P.  87 7 

Barry  v.  Butlin 2 Moo.  P.C.  480 215,  223 

Bassano  v.  Bradley [1896]  1 Q.B.  645 401 

Baxendale  v.  McMurray L.R.  2 Ch.  790 461 

Baxter  v.  London  County  Council.  ...  63  L.T.R.  767,  at  p.  771 52 

Bealey  v.  Shaw 6 East  208 461 

Beard  v.  Westcott 5 Taunt.  393 175 

Beatty  v.  Beatty 1 O.W.N.  243 7 

Beck’s  Case . L.R.  9 Ch.  392 258 

Bedfordshire,  Justices  of,  v.  Commis- 
sioners for  Improvement  of 

Bedford 7 Ex.  658 556 

Behn  v.  Bumess 3 B.  & S.  751 477 

Bell  v.  Rowe 26  Yict.  L.R.  511 151 

Bellerby  v.  Rowland  & Marwood’s 

Steamship  Co [1902]  2 Ch.  14 261 

Benor  v.  Canadian  Mail  Order  Co. ...  10  O.W.R.  1091 377,  381 

Bewick,  In  re [1911]  1 Ch.  116 175,  179 

Bibby  v.  Davis 1 O.W.R.  189 48,  50 

Bicknell  v.  Grand  Trunk  R.W.  Co. ...  26  A.R.  431 437,  439 

Biffin  v.  Bignell 7 Ex.  877 7 

Birch,  In  re 15  C.B.  743 399,  401 

Birmingham  Dudley  and  District 

Banking  Co.  v.  Ross 38  Ch.D.  295 471 

Birney  v.  Toronto  Milk  Co 5 O.L.R.  1 378 

Bisdee,  Ex  p.,  In  re  Baker 1 Mont.  D.  & DeG.  333 451 

Bishop  v.  Bishop [1897]  P.  138,  at  p.  149 7 

Bishop  v.  Bishop 10  O.W.R.  177 623 

Bishop  v.  Pentland 7 B.  & C.  219,  at  p.  223 69 

Black  v.  Delaware  and  Raritan  Canal 

Co 22N.J.  Eq.  130,  402 593 

Blackburn  v.  McCallum 33  S.C.R.  65 175,  177 

Blackburne  v.  Somers 5 L.R.  Ir.  1 461 

Blake  v.  White 1 Y.  & C.  (Ex.)  420,  426 185 

Bohan  v.  Galbraith 13  O.L.R.  301,  15  O.L.R.  37 625 

Bolton  Partners  v.  Lambert 41  Ch.D.  295 625 

Bonar  v.  Macdonald 3 H.L.C.  226,  238 185 

Bonner  v.  Bonner 13  Ves.  379 89 

Book  v.  Book 32  O.R.  206,  1 O.L.R.  86 206 

Booth  v.  Ammerman 4 Bradford  (N.Y.  Surr.)  129,  at 

p.  133 120 

Booth  v.  Ratte 21  S.C.R.  637,  643 623 

Bothwell  v.  Burnside,  Re 31  O.R.  695 391,  395,  396 

Boultbee  v.  Burke 9 O.R.  80 572,  575 

Bowen,  In  re [1893]  2 Ch.  491 177 

Boyle  and  Young,  Re 1 Mining  Commissioner’s  Cas.  1. . 618 

Boyse  v.  Rossborough 6 H.L.C.  2 309 

Bradley  v.  Elliott 11  O.L.R.  398 624,  629 

Brady  v.  Chicago  and  Great  Western 

R.W.  Co 114  Fed.  Repr.  100  426 

Brady  v.  Sadler 17  A.R.  365 459,  476 

Brandao  v.  Barnett 12  Cl.  & F.  787 184 

Brennan  v.  Cameron 1 O.W.N.  430  3 

Brice  v.  Munro 12  A.R.  453 323,  325,  330 


XXVI.] 


CASES  CITED. 


XVII 


Name  of  Case. 

Bridge,  In  re 

Bristol  Cardiff  and  Swansea  Aerated 

Bread  Co.  v.  Maggs 

Britton  v.  Fisher 

Brocklebank,  Ex  p 

Bronson  and  Canada  Atlantic  R.W. 

Co.,  Re 

Brow  v.  Boston  and  Albany  R.R.  Co. 

Brown  v.  Peck 

Brudenell  v.  Elwes 

Brunswick,  Duke  of,  v.  Harmer 

Brunton  v.  Electrical  Engineering 

Corporation 

Buckinghamshire,  Earl  of,  v.  Drury.  . 

Bullen  v.  Denning 

Burchell  v.  Gowrie  and  Blockhouse 

Collieries  Limited 

Burfoot  v.  DuMoulin 

Burkinshaw  v.  Nicolls 

Burland  v.- Earle 

Burnaby  v.  Equitable  Reversionary 

Interest  Society 

Burrows  v.  Lang 

Burrell,  In  re,  Burrell  v.  Smith 

Busk  v.  Royal  Exchange  Assurance 

Co 

Buxton  v.  Rust 


Where  Reported.  Page. 

1 Cr.  & Ph.  338,  347 546 

44Ch.D.  616 625 

26  U.C.R.  338,  at  pp.  339,  340.  . . 185 
6 Ch.D.  358,  359 454 

13  P.R.  440 400 

157  Mass.  399 426 

1 Eden  140 93 

1 East  442 175 

14  Q.B.  185 154,  155,  158,  159 

[1892]  1 Ch.  434 650 

2 Eden  60,  71 454 

5 B.  & C.  842,  850 648 

[1910]  A.C.  614. . . .43,  44,  45,  585,  587 
21  O.R.  583 509 

3 App.  Cas.  1004 256 

[1902]  A.C.  83 380 

28  Ch.D.  416,  424 454 

[1901]  2 Ch.  502,  510 473 

L.R.  7 Eq.  399 145,  148,  152,  153 

2 B.  & Aid.  73 68 

L.R.  7 Ex.  279 630 


C. 


Cadaval  v.  Collins 4 A.  & E.  858. . . . 

Calder  and  Hebble  Navigation  Co.  v. 

Pilling 14  M.  & W.  76.  . . 

Callisher  v.  Bischoffsheim L.R.  5 Q.B.  449. . 

Cameron  v.  Spiking  and  Teed 25  Gr.  119 

Campbell  v.  Dennistoun 23  C.P.  339 

Campbell  v.  Royal  Canadian  Bank. . . 19  Gr.  334 

Canada  Permanent  Loan  and  Savings 

Co.  v.  Ball 30  O.R.  557 

Canadian  Camera  and  Optical  Co.,  Re.  2 O.L.R.  677 

Canadian  Casualty  and  Boiler  Insur- 
ance Co.  v.  Boulter 39  S.C.R.  558.  . . . 

Canadian  Casualty  and  Boiler  Insur- 
ance Co.  v.  Hawthorne 39  S.C.R.  558.  . . . 

Canadian  Northern  R.W.  Co.  v. 

Anderson 45  S.C.R.  355 

Canadian  Pacific  R.W.  Co.  v.  Rosin. . . 2 O.W.N.  610.  . . . 
Canadian  Railway  Accident  Insurance 

Co.  v.  Haines 44  S.C.R.  386 

Carne  v.  Long 2 DeG.  F.  & J.  75 

Carpenter  v.  Canadian  Railway  Acci- 
dent Insurance  Co 18  O.L.R.  388.  . . . 

Carr  v.  Lynch [1900]  1 Ch.  613. . . 

Carslake  v.  Mapledoram 2 T.R.  473 

Carter  v.  Boehm 3 Burr.  1905 

Carter  v.  Foley-O’Brien  Co 3 O.W.N.  888 

Cartwright  v.  Cartwright 12  O.L.R.  272.  . . . 

Cave  v.  Hastings 7 Q.B.D.  125 

Central  Bank,  Re 21  O.R.  515 

Chadburn  v.  Moore 61  L.J.Ch.  674. . . . 

Chaddock  v.  British  South  Africa  Co.  [1896]  2 Q.B.  153. . 

Chamberlayne  v.  Brockett L.R.  8 Ch.  206.  . . 

Chaplin  v.  Hicks [1911]  2 K.B.  786. 


309 

599,  600 

308,  310 

625 

626 

.404,  405,  407,  408 

185 

.279,  289,  565,  570 

57,  69 

57,  69 

125 

628,  629 

70 

105,  108,  109 

75,  80 

626 

401 

511 

334 

207 

626 

653 

629 

495 

173,  175,  176,  181 
447 


B XXVI.  O.L.R. 


XVIII 


CASES  CITED. 


Name  of  Case. 

Chapman  and  City  of  London,  Re ...  . 

Cherry  v.  Mott 

Ching  v.  Jeffery 

Chisholm  v.  Chisholm 

Christ’s  Hospital  v.  Grainger 

Christian  v.  Poulin 

Christopherson  v.  Naylor 

Clark,  In  re 

Clark  v.  Clark 

Clarke  v.  Sarnia  Street  R.W.  Co 

Clarkson  v.  McMaster  & Co 

Clarkson  v.  Sterling 

Clayton  v.  Corby 

Cleaver  v.  Mutual  Reserve  Fund  Life 

Association 

Clover  Clayton  & Co.  Limited  v. 

Hughes 

Cochrane,  In  re 

Cockburn,  Re 

Coles  v.  Trecothick 

Colledge  v.  Pike 

Collins  v.  Kilroy 

Columbia  Insurance  Co.  v.  Lawrence. . 
Commerce  et  1’ Industrie  en  France, 
Societe  Generale  du,  v.  Johann 

Maria  Farina  & Co 

Congreve  v.  Palmer 

Connecticut  Mutual  Life  Insurance  Co. 

v.  Jacobson 

Conway  v.  Guelph  and  Goderich  R.W. 

Co 

Cooke  v.  Stratford 

Cooper  v.  Hubbuck 

Cork  and  Bandon  R.W.  Co.  v.  Goode. 

Cormier,  Ex  p 

Cornwall  v.  Cornwall 

Cornwall  Furniture  Co.,  Re 

Cort  v.  Winder 

Coulson  v.  Disborough 

Coulthurst  v.  Carter 

Cox  Moore  v.  Peruvian  Corporation 

Limited 

Coyne  v.  Lee 

Crane,  In  re 

Creamer  v.  West  End  St.  R.W.  Co. . . 

Crosby  v.  Ball , 

Croskery,  Re 

Crossley  & Sons  Limited  v.  Lightowler 

Crow  v.  Wood 

Cumming,  In  re 

Cummings  and  County  of  Carleton, 
Re 


[VOL. 


Where  Reported.  Page. 

19  O.R.  33 391 

1 My.  & Cr.  123 175 

12  A.R.  432 184,  185 

40  S.C.R  115 116,  602,  607 

16  Sim.  83,  1 Macn.  & G.  460. . 174,  176 

1 O.W.R.  275 207 

1 Mer.  320 295,  297,  298 

8 O.L.R.  599 295 

10  P.D.  188 7 

42  U.C.R.  39 650 

25  S.C.R.  96 287 

15  A.R.  234 653 

5Q.B.  415 475 

[1892]  1 Q.B.  147 616,  621 

[1910]  A.C.  242 57,  70 

16  O.L.R.  328 207 

27  O.R.  450 459,  471,  481 

9 Ves.  234 626 

56  L.T.R.  124 337 

1 O.L.R.  503 206 

10  Peters  (S.C.)  507,  at  p.  517. . . 69 


[1904]  1 K.B.  794 494 

16Beav.  435 298 

75  Minn.  429 556 

9 O.W.R.  369 334 

13  M.  & W.  379,  387 500 

12  C.B.N.S.  456 466 

13C.B.  826 151 

17  Can.  Crim.  Cas.  179 488 

12  O.W.R.  552 510,  511 

20  O.L.R.  520 254,  259 

1 Coll.  320 295 

[1894]  2 Q.B.  316 509 

15  Beav.  421 298 

[1908]  1 Ch.  604 649 

14  A.R.  503 569 

[1908]  1 Ch.  379 ....  120 

31  N.E.  Repr.  391 10,  13 

4 O.L.R.  496 374 

16  O.R.  207 407 

L.R.  2 Ch.  478,  481 473 

13  Beav.  271 649 

1 DeG.  M.  & G.  537 546 


25  O.R.  607,  26  O.R.  1. 


.390,  399 


D. 


Dalton  v.  Angus 6 App.  Cas.  740 470,  481 

Darley  v.  The  Queen  . 12  Cl.  & F.  520 271 

David  Lloyd  & Co.,  In  re. 6 Ch.D.  339 644 

Davis,  Re 18  O.L.R.  384 

. . .113,  115,  367,  371,  373,  602,  607 

Davis  v.  McCaffrey 21  Gr.  554 371,  372 

Dawson  v.  Isle [1906]  1 Ch.  633,  637 185 

Deacon  v.  Chadwick 1 O.L.R.  346 3 


xxvi]. 


CASES  CITED. 


XIX 


Name  of  Case. 
Debenham  v.  Mellon 


Where  Reported.  Page. 

5 Q.B.D.  394,  6 App.  Cas.  24. . . . 


Deere  v.  Beauvais 

Dennistoun  v.  Fyfe 

Devine  v.  Griffin 

Dewar  v.  Tasker  & Sons  Limited 

Dickey  v.  McCaul 

Dinsmore  v.  Shackleton 

Doan  v.  Davis 

Doan  v.  Michigan  Central  R.W.  Co.  . 

Dobson  v.  Dobson. 

Dodge  v.  Smith 

Donnellan  v.  O’Neill 

Donovan  v.  Laing  Wharton  and  Down 
Construction  Syndicate  Limited.. 

Driffil  v.  McFall 

Dryden  v.  Smith 

Duckworth,  In  re. 

Dudgeon  v.  Pembroke 

Dumphy  v.  Kehoe 

Durant  v.  Canadian  Pacific  R.W.  Co. 
Durant  & Co.  v.  Roberts  and  Keighley 

Maxsted  & Co 

Dutton,  In  re 

Dyke  v.  Stephens 


E. 


Eby-Blain  Co.  v.  Montreal  Packing 

Co 

Edward  Nelson  & Co.  v.  Faber  & Co. 
Elgin  Loan  and  Savings  Co.  v.  London 


572,  573 

7 Q.P.R.  448 

374 

11  Gr.  372 

450 

4 Gr.  603 

626 

23  Times  L.R.  259.  ..  . 

411 

14  A.R.  166 

649 

26  C.P.  604 

509 

23  Gr.  207 

405,  406 

17  A.R.  481 

125 

7 P.R.  256 

. .434,  435 

1 O.W.R.  803,  2 O.W.R.  561 509 

Ir.  R.  5 Eq.  523,  532.. 

90 

[1893]  1 Q.B.  629 

410,  426 

41  U.C.R.  313 

148 

17  P.R.  500 

. .430,  435,  436 

L.R.  2 Ch.  578 

570 

2 App.  Cas.  284 

70 

21  Rev.  Leg.  119 

576,  579 

13  O.W.R.  316 

124 

[1900]  1 Q.B.  629 

625 

4 Ex.  D.  54 

Ill 

30  Ch.D.  189 

375 

. 

2 Coll.  342 

90 

3 Q.B.D.  432 

7,  8 

17  O.L.R.  292 

288 

[1903]  2 K.B.  367 

650 

11  O.L.R.  330 

:: . 82 

Ellis  and  Town  of  Renfrew,  Re 21  O.L.R.  74,  23  O.L.R.  427. . . . 

340,  348,  >352 

Ellis  v.  Barker L.R.  7 Ch.  104 309 

Embury  v.  West 15  A.  R.  357. . . : 653 

Emmet  v.  Dewhurst 3 Macn.  & G.  587 583 

Enoch  and  Zaretzky  Bock  & Co.’s 

Arbitration,  In  re [1910]  1 K.B.  327.  509,  521 

Essery  v.  Grand  Trunk  R.W.  Co 21  O.R.  224 148,  151 

Etherington  and  Lancashire  and  York- 
shire Accident  Insurance  Co.,  In 

re [1909]  1 K.B.  591.  . . .57,  58,  70,  75,  80 

Evelyn  v.  Lewis 3 Ha.  472 649 

Ewart  v.  Cochrane 4 Macq.  H.L.  117 479 


Farquharson  v.  Barnard  Argue  Roth 


Fenton  v.  Thorley  & Co.  Limited 


Ferguson  v. 


Filby  v.  Hounsell. 


25  O.L.R.  93 

650 

[1894]  1 Q.B.  552 

391 

12  O.L.R.  245 

602,  612 

9 P.R.  329 

391 

[1903]  A.C.  443 

74 

8 P.R.  556 

602 

26  U.C.R.  26 

3 

9 B.  & C.  59 

625 

26  O.L.R.  367 

602,  605 

[1896]  A.C.  600,  611 

598 

[1896]  2 Ch.  737 

629 

XX 


CASES  CITED. 


Name  of  Case. 


Where  Reported. 


[VOL. 

Page. 
. . 207 


Fisher  v.  Fisher 1 O.W.R.  442. 

Fitzroy,  Township  of,  v.  County  of 

Carleton 9 O.L.R.  686 199,  200 

Fleming,  Re 11  P.R.  272,  285 177 

Fleming,  Re 7 O.L.R.  651 295,  301 


Foley  v.  Fletcher 3 H.  & N.  769.  . 

Forster  v.  Forster  and  Berridge,  Re. . 4 B.  & S.  187.  . . 

Fowler  v.  Fowler 33  Beav.  616.  . . 

Foxwell  v.  Kennedy 24  O.L.R.  189.  . 

Fuller  v.  Hooper 2 Ves.  Sr.  242  — 

Fulton  v.  Andrew L.R.  7 H.L.  348. 

Fynn,  In  re 2 DeG.  & S.  457. 

G. 


. . . . 120 
. . . . 401 

. ...  no 

. . . . 107 
. . . . 90 

206,  215 
. ...  609 


Gardner  v.  Hodgson’s  Kingston  Brew- 
ery Co 

Garner  v.  Township  of  Stamford 

Gassiot,  In  re 

Gemmill  v.  Nelligan 

General  Mutual  Insurance  Co.  v. 

Sherwood *.  . 

General  Steam  Navigation  Co.  v. 
British  and  Colonial  Steam  Navi- 
gation Co 

Gibbons  v.  Ogden 

Gibson  v.  Bott 

Gilbey  v.  Great  Western  R.W.  Co. . . . 

Gilchrist.  In  re 

Giles  v.  Perkins 

Gillie  v.  Young 

Gissing  v.  T.  Eaton  Co 

Glossop  v.  Heston  and  Isleworth 

Local  Board 

Glyn,  Ex  p 

Glynn  v.  Margetson  & Co 

Going  v.  Hanlon 

Goldsmid  v.  Tunbridge  Wells  Im- 
provement Commissioners 

Goldstein  v.  Canadian  Pacific  R.W. 

Co 

Goodman  v.  Saltash  Corporation 

Goodwin  v.  Waghorne 

Gordon  v.  Gordon 

Gordon  v.  Spencer 

Goss  v.  Lord  Nugent 

Goubot  v.  De  Crouy 

Government  Stock  and  Other  Securi- 
ties Investment  Co.  v.  Manila 

R.W.  Co 

Gowland  v.  Garbutt 

Grand  Trunk  R.W.  Co.  v.  Attorney- 

General  of  Canada 

Grand  Trunk  R.W.  Co.  v.  Griffith. . . . 
Grand  Trunk  R.W.  Co.  v.  Huard. .... 

Grass  v.  Allan,  In  re 

Graves,  Ex  p 

Gray  v.  Garman 

Gray  v.  Smith 

Great  Central  R.W.  Co.  v.  Lancashire 

and  Yorkshire  R.W.  Co 

Green,  Ex  p 


[1903]  A.C.  229 469 

7 O.L.R.  50 77 

70  L.J.N.S.  Ch.  242 110 

26  0.R.  307 404 

14  How.  S.C.  351,  at  p.  366 69 

L.R.  3 Ex.  330,  L.R.  4 Ex.  238. . . 410 

9 Wheat.  1,  204 599 

7 Yes.  89,  96 120 

102  L.T.R.  202 75,  78 

[1907]  1 Ch.  1 546 

9 East  12 185 

1 O.L.R.  368 367,  374 

25  O.L.R.  50 309 

12  Ch.D.  102,  at  p.  122 52 

1 Mont.  D.  & DeG.  25 451 

[1893]  A.C.  351,  at  p.  355 272 

4 Ir.  R.C.L.  144 177 

L.R.  1 Eq.  161,  L.R.  1 Ch.  349.  . 
460,  474 

23  O.L.R.  536 437,  439 

7 App.  Cas.  633,  648 475 

4 L.J.N.S.  Ch.  172 451 

3 Swanst.  400 309 

2 Blackf.  (Ind.)  286,  288 159 

5 B.  & Ad.  58 583 

1 C.  & M.  772 325 

[1897]  A.C.  81 288 

13  Gr.  578 147 

[1907]  A.C.  65,  68 598 

45  S.C.R.  380 79 

36  S.C.R.  655 410 

26  U.C.R.  123 390 

19  Ch.D.  1 578 

2 Hare  268 297 

43  Ch.D.  208 630 

13  Ry.  & Canal  Traffic  Cas.  266.  593 
35  N.B.R.  137 596 


XXVI. 


CASES  CITED. 


XXI 


Name  of  Case. 


Where  Reported.  Page. 


Green  v.  Bartlett 14  C.B.N.S.  681,  685 45 

Green  v.  Stevenson 9 O.L.R.  671 625,  626 

Grills  v.  Farah 21  O.L.R.  457 323,  324,  326,  329 

Gyde,  Re 79  L.T.R.  261 176 

Gyfford  v.  Woodgate 11  East  297 325 


H. 

Habergham  v.  Ridehalgh 

Hague,  Re 

Haig  v.  Swiney 

Haigh,  Ex  p 

Haldimand  Dominion  Election  Case. . 

Hall  v.  Berry 

Hall  v.  Lees 

Hall  v.  Lund 

Hall  v.  Severne 

Hall  v.  Smith 

Halley,  The 

Hammans  v.  Great  Western  R.W.  Co. 

Hannam,  In  re 

Hansford  v.  Grand  Trunk  R.W.  Co. . . 

Harrison,  Re 

Harrison  v.  Guest 

Harrison  v.  Mobbs 

Hart  v.  Hart 

Hartopp  v.  Hartopp 

Hay  and  Town  of  Listowel,  Re 

Hay  v.  Employers’  Liability  Assur- 
ance Corporation 

Haynes  v.  Leland 

Hedges  v.  Harpur 

Heller  v.  Howard 

Hendrick  v.  Employers’  Liability 

Assurance  Corporation 

Heney  v.  Low 

Hensey  v.  White 

Henwood  v.  Overend 

Hoare  v.  Osborne 

Hodge  v.  The  Queen 

Hoeffler  v.  Irwin 

Hoghton  v.  Hoghton 

Holland,  In  re 

Holmes  v.  Kidd 

Holroyd  v.  Marshall 

Hooper  v.  Accidental  Death  Insurance 

Co 

Hooper  v.  Lane 

Hope  v.  Hope 

Hopkins,  Re,  Barnes  v.  Hopkins 

Horsfall  v.  Boisseau 

Hotchkiss’s  Trusts,  In  re 

Houlihan  v.  Preferred  Accident  In- 
surance Co.  of  New  York 

Hoyle,  In  re 

Huguenin  v.  Baseley 

Humphrys  v.  Polak 

Hussey  v.  Horne-Payne 

Hutchinson,  Re ! 

Hyman  v.  Van  den  Bergh 


L.R.  9 Eq.  395 300 

14  O.R.  660 404 

I Sim.  & Stu.  487 177 

II  Ves.  403 450 

1  Ont.  Elec.  Cas.  529 340 

10  O.W.R.  954 623 

[1904]  2 K.B.  602 411 

1 H.  & C.  676 479 

9 Sim.  515 87,  89,  90 

2 Bing.  156 425 

L.R.  2 P.C.  193 412 

4 Rv.  & Canal  Traffic  Cas.  181 . . 593 
[1897]  2 Ch.  39 295,  299 

13  O.W.R.  1184 410,  411,  425 

31  O.R.  314 207,  375 

2 Jur.  N.S.  911 307,  309 

12  O.W.R.  465 625 

18  Ch.D.  670 7 

21  Beav.  259 309 

28  O.R.  332 556 

6 O.W.R.  459 82 

29  Me.  233,  234,  243 159 

3 DeG.  & J.  129 120 

11  111.  App.  554 159 

62  Fed.  Repr.  893 10 

9 Gr.  265 403 

[1900]  1 Q.B.  481,  at  p.  485 73 

1 Mer.  23 87,  89 

L.R.  1 Eq.  585 110 

9 App.  Cas.  117 598 

8 O.L.R.  740 625 

15  Beav.  278 309 

[1902]  2 Ch.  360 626,  630 

3 H.  & N.  891 184 

10  H.L.C.  191,  9 Jur.  N.S.  213,  2 

DeG.  F.  & J.  596 564,  567 

5H.  &N.  546 11 

6 H.L.C.  443 622 

8 DeG.  M.  & G.  731 607 

8 P.R.  160 404 

21  A.R.  663 569 

L.R.  8 Eq.  643 295,  298 

145  N.Y.  St.  Repr.  1048 57,  64 

[1893]  1 Ch.  84 626,  630 

14  Ves.  273 309 

[1901]  2 K.B.  385 602,  607 

4 App.  Cas.  311 625,  630 

26  O.L.R.  113 367,  371 

[1908]  1 Ch.  167 466 


I. 

Ilchester,  Earl  of,  Ex  p 7 Ves.  348 


372,  373 


XXII 


CASES  CITED. 


[VOL. 

Name  of  Case.  Where' Reported.  Page. 

Ilfracombe  R.W.  Co.  v.  Devon  and 

Somerset  R.W.  Co L.R.  2 C.P.  15 326 

Illingworth  v.  Houldsworth [1904]  A.C.  355 650 

Ive  v.  King 16  Beav.  46 297 


J. 


Jansen,  In  re 12  O.L.R.  63 207 

Jarrett  v.  Hunter 34  Ch.D.  182 629 

Jenkins  v.  Wilcock 11  C.P.  505 323,  326,  330 

John  Griffiths  Cycle  Corporation  Lim- 
ited v.  Humber  & Co.  Limited. . . [1899]  2 Q.B.  414 629 

Johnston  v.  Wade 17  O.L.R.  372 279,  284,  286,  287 

Jolly  v.  Rees 15  C.B.N.S.  628 572,  573 

Jones  v.  Bank  of  Upper  Canada 12  Gr.  429,  13  Gr.  74 450 

Jones  v.  Chapman 5 Blackf.  (Ind.)  88 159 

Jones  v.  Sculiard [1898]  2 Q.B.  565 412 

Jordan  v.  Provincial  Provident  Insti- 
tution  28  S.C.R.  554 75,  82 

Joshua  Stubbs  Limited,  In  re [1891]  1 Ch.  187 644 

Jurisdiction  of  a Province  to  Legislate 
Respecting  Abstention  from  La- 
bour on  Sunday,  In  re 35  S.C.R.  581 591 


K. 


Keighley  Maxsted  & Co.  v.  Durant  & 

Co 

Kelly  v.  Kelly 

Kennedy  v.  Kennedy 

Kennedy  v.  Kennedy 

Kennedy  v.  Oldham 

Kensington,  Ex  p 

Kessowji  Issur  v.  Great  Indian  Pen- 
insula R.W.  Co 

Keys,  Re 

Kilroy  v.  Simkins 

King  v.  Waring 

Kinghorn  and  City  of  Kingston,  Re. . . 
Kingston,  City  of,  v.  Kingston,  etc., 

R.W.  Co 

Kinnaird  v.  Trollope 

Kitching  v.  Hicks 

Knill  v.  Towse 

Knox  v.  Gye 

Kreh  v.  Moses 

Kruse  v.  Johnson 

Kurtz  and  Co.  v.  Spence  and  Sons. . . . 


L. 


Lacon  v.  Allen 

Lafrance  v.  Lafrance 

Lambert,  In  re 

Lands  Allotment  Co.,  In  re 

Lanphier  v.  Buck 

Lawrence  v.  Accidental  Insurance  Co. 

Lawson  v.  McGeoch 

Lecone  v.  Sheires 

Leconfield  v.  Lonsdale 

Lee  v.  Arthur 

Lewis,  Re 

Leyton  Urban  District  Council  v. 

Chew 


[1901]  A.C.  240 

624,  626 

20  Man.  L.R.  579 

249 

24  O.L.R.  183 

107 

13  O.W.R.  984 

107 

15  O.R.  433 

630 

2 Yes.  & B.  79 

450 

96  L.T.R.  859 

.510,  517,  521 

12  O.W.R.  160 

602 

26  C.P.  281 

184 

5 Esp.  13 

.155,  156,  159 

26  U.C.R.  130 

556 

.23  O.R.  399,  25  A.R.  462 

50 

39  Ch.D.  636 

152 

6 O.R.  739 

288,  569 

24  Q.B.D.  186,  198 

341 

L.R.  5 H.L.  656 

253 

22  O.R.  307 

207 

[1898]  2 Q.B.  91 

558,  560 

58  L.T.R.  438 

.309,  310,  315 

!• 

3 Drew.  579 

450,  451 

18  P.R.  62 

' 7 

[1908]  2 Ch.  117 

300 

[1894]  1 Ch.  616,  at  p.  632 253 

34  L.J.  Ch.  650,  656 

299 

7 Q.B.D.  216 

57,  58,  67,  73 

20  A.R.  464 

653 

1 Vern.  442 

372 

L.R.  5 C.P.  657,  726.  . . 

471 

100  L.T.R.  61,  62 

.332,  335,  338 

11  P.R.  107 

. . .83,  84,  86 

[1907]  2 K.B.  283 

561 

xxvi]. 


CASES  CITED. 


XXIII 


Name  of  Case.  Where  Reported.  Page. 


L’Herminier,  In  re 

Lime  Rock  Bank  v.  Mallett 

Lincoln  Election  Petition,  Re 

Lindsay  v.  Lindsay 

Lints  v.  Lints 

Liverpool  and  London  and  Globe  In- 
surance Co.  v.  Agricultural  Sav- 
ings and  Loan  Co 

Lloyd  v.  Davis 

Lloyd  v.  Matthews 

Locators  v.  Clough 

London  and  North-Western  R.W.  Co. 

v.  Evans 

London  Pressed  Hinge  Co.,  In  re 

Long,  In  re,  Exp.  Cuddeford 

Long  v.  Millar 

Longaker,  Re 

Longendale  Cotton  Spinning  Co.,  In 

re 

Lord’s  Day  Act  of  Ontario,  Re 

Loring  v.  Thomas 

Low  v.  Guthrie 

Luckhardt,  Re 

Lundy  v.  Lundy 

Lyons  v.  Blenkin 


[1894]  1 Ch.  675 177 

42  Me.  349,  358 185 

4  A.R.  206 340,  355,  356 

23  Gr.  210 406,  407 

6 O.L.R.  100 207 


33  S.C.R.  94 80 

3 L.J.O.S.K.B.  38 185 

51N.Y.  124 46 

17  Man.  L.R.  659 43,  45,  47 

[1892]  2 Ch.  432 471 

[1905]  1 Ch.  576 286 

20Q.B.D.  316 331 

4C.P.D.  450 625 

12  O.W.R.  1193 602 

8 Ch.D.  150 644 

1 O.W.R.  312 590 

1 Dr.  & Sm.  497,  510.  . . .295,  296,  300 

[1909]  A.C.  278 205,  206 

29  O.R.  Ill 408 

24  S.C.R.  650 616,  621 

Jac.  245 116 


M. 


McCaffrey  v.  McCaffrey 

McCartan  v.  Belfast  Harbour  Com- 
missioners   

McCrae  v.  Molsons  Bank 

McCumber  and  Doyle,  In  re 

McDonald  v.  Murray 

McEwan  v.  Milne 

McGrath  and  Town  of  Durham,  In  re. 

McGregor  v.  McGregor. . 

McGuin  v.  Fretts 

McIntyre  Brothers  v.  McGavin 

McKeand  v.  Canadian  Pacific  R.W. 

Co 

Mackenzie  v.  Maple  Mountain  Mining 

Co 

Mackenzie  v.  Sligo  and  Shannon  R.W. 

Co 

McKinnon  v.  Lundy 

McLeod  v.  Emigh  (2),  Re 

McRoberts  v.  Steinoff 

Maddison  v.  Alderson 

Malcolm  v.  Ferguson 

Man  v.  Ricketts 

Mannox  v.  Greener 

Mansell  v.  Clements 

Manufacturers’  Accident  Indemnity 

Co.  v.  Dorgan 

Mardorf  v.  Accident  Insurance  Co. . . . 

Marine  Mansions  Co.,  In  re 

Marsh  v.  Astoria  Lodge 

Marsh  v.  Joseph 

Martin  v.  Mackonochie 

Martin  v.  Martin  & Co 

Martindale  v.  Clarkson 

Mason  v.  MacDonald 


18  A.R.  599 206,  225,  309 

44  Irish  Law  Times  223 412,  425 

25  Gr.  519 653 

26  U.C.R.  516 391,  396 

2 O.R.  573,  11  A.R.  101. ... . .629,  630 

5 O.R.  100 207 

17  O.L.R.  514 340,  348 

21  Q.B.D.  424  7 

13  O.R.  699 649 

[1893]  A.C.  268 461 

Not  reported 79 

20  O.L.R.  615 378 

4 E.  & B.  120 326 

24  O.R.  132,  21  A.R.  560 616,  621 

12  P.R.  503 399 

11  O.R.  369 653 

8 App.  Cas.  467,  488 582,  625 

14  O.W.R.  737,  1 O.W.N.  77 206 

7 Beav.  93,  101 85 

L.R.  14  Eq.  456,  462 177 

L.R.  9 C. P.139 45 

58  Fed.  Repr.  945 57,  58,  66,  67 

[1903]  1 K.B.  584 57,  68 

L.R.  4 Eq.  601,  610 649 

27  111.  421 493 

[1897]  1 Ch.  213 624 

3 Q.B.D.  730,  4 Q.B.D.  697.  .391,  401 

[1897]  1 Q.B.  429 336 

6 A.R.  1,  6 408 

25C.P.  435 569 


XXIV 


CASES  CITED. 


[VOL. 


Name  of  Case. 

Masuret  v.  Mitchell 

Matthew  Guy  Carriage  and  Auto- 
mobile Co.,  Re,  Thomas’s  Case.  . 
Maudslay  Sons  & Field, In  re, Mauds]  ay 
v.  Maudslay  Sons  & Field 

Mendels  v.  Gibson 

Metcalfe,  In  re 

Metcalfe  v.  Hutchinson 

Midland  R.W.  Co.  v.  Guardians  of 

Edmonton  Union 

Miles,  Re 

Miles  v.  New  Zealand  Alford  Estate 

Co 

Mill  v.  Commissioner  of  New  Forest.. 

Milroy  v.  Lord 

Mingeaud  v.  Packer 

Molsons  Bank  v.  Beaudry 

Mones  v.  McCallum 

Monypenny  v.  Dering 

Moore  v.  Campbell 

Moore  v.  Kirkland 

Morel  Brothers  & Co.  Limited  v.  Earl 

of  Westmoreland 

Morgan  v.  Chetwynd 

Morgan  v.  Johnson 

Morlock  and  Cline  Limited,  Re,  Sarvis 

and  Canning’s  Claims 

Morrow  v.  Jenkins 

Mountfort,  Exp 

Mountfort,  Ex  p 

Munsen  v.  Hauss 

Murray.  Re 

Murray  v.  Canada  Central  R.W.  Co. . 

N. 


Where  Reported.  Page. 

26  Gr.  435 450 

3 O.W.N.  902 262 

[1900]  1 Ch.  602 4 

9 0.L.R.  94 147 

[1909]  1 Ch.  424 296 

1 Ch.D.  591,  at  p.  594 177 

[1895]  1 Q.B.  357 391,  395 

14  0.L.R.  241 90 

32  Ch.D.  266 308,  310 

18  C.B.  60 471 

4 DeG.  F.  & J.  264 207 

21  O.R.  267,  19  A.R.  290 207,  375 

Q.R.  11  K.B.  212 291,  292 

17  P.R.  398 649 

2 D.M.  & G.  145 175 

10  Ex.  323,  332 582 

5 C.P.  452 323,  326,  330 

[1903]  1 K.B.  64,  [1904]  A.C.  11. . 572 
4 F.  & F.  451,  457 574 

3 O.W.N.  297 629 

23  O.L.R.  165 377,  381 

6 O.R.  693 177 

14Ves.  606 450 

15Ves.  445 372 

22  Gr.  279 147 

4 0.W.R.  281 207 

7 A.R.  646,  655 509 


Nalder  v.  Hawkins 2 My.  & K.  243 375 

National  Debenture  and  Assets  Cor- 
poration, In  re [1891]  2 Ch.  505,  516 510 

National  Telephone  Co.  v.  Constables 

of  St.  Peter  Port [1900]  A.C.  317,  321 649 

Neath  Harbour  Smelting  and  Rolling 

Works,  In  re 2 Times  L.R.  94 510 

Neaverson  v.  Peterborough  Rural  Dis- 
trict Council [1901]  1 Ch.  22,  [1902]  1 Ch. 

557 471,475,483 

Neilson  v.  Trusts  Corporation  of 

Ontario 24  O.R.  517 : 207 

New  Hamburg  Manufacturing  Co.  v. 

Webb 23  O.L.R.  44 477 

Newburgh  Associate  Reformed  Church 
Trustees  v.  Princeton  Theological 

Seminary  Trustees 4 N.J.  Eq.  77 103 

Newell  v.  Radford L.R.  3 C.P.  52 630 

Nicholl  v.  Elliott 3 Gr.  536 434 

Nixon  v.  Brownlow 1 H.  & N.  405 325 

Nobel’s  Explosives  Co.  v.  Jones 17  Ch.D.  721,  at  p.  739.  .204,  206,  212 

Noble  v.  Ward L.R.  2 Ex.  135 582 

North  British  R.W.  Co.  v.  Wood 18  Ct.  of  Sess.  Cas.  (4th  Series) 

27 306 

Northrup  v.  Railway  Passenger  Assur- 
ance Co 43  N.Y.  516 11,  64 

Norton  v.  Smith 20  U.C.R.  213 404 


XXVI.] 


CASES  CITED. 


XXV 


Name  of  Case.  Where  Reported.  Page. 

Nott  v.  Stoddard 38  Vt.  25,  31 159 

Nottawasaga,  In  re  Township  of,  and 

County  of  Simcoe 4 O.L.R.  1 391 

' 0. 

Ockford  v.  Freston 6 H.  & N.  466 622 

O’Donnell  v.  Nee 86  Fed.  Repr.  96 159 

0’ Farrell  v.  Limerick  and  Waterford 

R.W.  Co 13  Ir.  L.R.  365 400 

O’Hara,  In  re [1900]  2 I.R.  232 607,  610 

Oliver  v.  Hunting 44  Ch.D.  205  630 

Ooregum  Gold  Mining  Co.  of  India  v. 

Roper [1892]  A.C.  125 254,  260,  261,  262 

Orangeville  Local  Option  By-law, 

Re 20  O.L.R.  476 339,  340,  342,  346, 

cmq 

Ouimet  v.  Bazin 48  C.L.J.  439 601 

Oulds  v.  Harrison 10  Ex.  572 184 

Overend  Gurney  & Co.,  In  re,  Ex  p. 

Swan L.R.  6 Eq.  344.  . 184 

Overton  v.  Banister . 3 Hare  503 455 


P. 


Page  v.  Leapingwell 

Palmer,  In  re 

Palmer  v.  Hendrie 

Palmer  v.  Justice  Assurance  Society . . 

Parke  v.  Riley 

Parker  v.  Mitchell 

Parker  v.  Odette 

Parkes  v.  St.  George 

Patapsco  Insurance  Co.  v.  Coulter.  . . 

Pavey  v.  Davidson 

Paxton  v.  Jones 

Pearce  v.  Gardner 

Peck  and  Township  of  Ameliasburg, 

Re 

Peel  v.  Catlow 

People  v.  Doris 

People  v.  Muller 

Perry  v.  Barker 

Perth  Flax  and  Cordage  Co.,  Re 

Phillips  v.  Mullings 

Phillips  v.  Nairne 

Pine  Hill  Lutheran  Congregation  Trus- 
tees v.  St.  Michael’s  Evangelical 

Church  of  Pine  Hill 

Pirie  v.  Wyld 

Platt  v.  Forty-Second  St.  and  Grand 

St.  Ferry  R.R.  Co 

Polak  v.  Everett 

Portuguese  Consolidated  Copper 
Mines  Limited,  Re,  Exp.  Badman, 

Ex  p.  Bosanquet 

Potter  v.  Duffield 

Potter’s  Trust,  In  re 

Power  v.  Griffin 

Powis  v.  Ontario  Accident  Insurance 

Co 

Pratt  v.  Bunnell 


18Ves.  463 177 

[1893]  3 Ch.  369 301 

27  Beav.  349,  28  Beav.  341 

145,  147,  153 

6 E.  & B.  1015 326 

3 E.  & A.  215 404 

11  A.  & E.  788 466 

16  P.R.  69 4 

2 0.R.  342 569 

3 Peters  (S.C.)  222,  at  p.  233 ...  . 69 

23A.R.  9 3 

APT?  1Q£  404 

[1897] 'l  Q.B.  688. V. ... V. ...  .626,  630 

17  0.R.  54 556 

9 Sim.  372 298 

14  App.  Div.  N.Y.  117 137 

96N.Y.  408 137 

13Ves.  198 147 

13  0.W.R.  1140 279,  288 

L.R.  7 Ch.  244 206,  225 

4 C.B.  343,  at  pp.  350,  351 69 


48  Pa.  St.  20 103 

11  O.R.  422 303,  309,  315,  323 

2 Hun  (N.Y.)  124 10,  13 

1 Q.B. D.  669 185 


45  Ch.D.  16 625 

L.R.  18  Eq.  4 624,  629 

L.R.  8 Eq.  52 295,  298 

33  S.C.R.  39 398 


1 O.L.R.  54. 
21  O.R.  1.  . . 


11 

404 


XXVI 


CASES  CITED. 


[VOL. 

Pridie  v.  Field 19  Beav.  497 120 

Prince  v.  Oriental  Bank  Corporation..  3 App.  Cas.  325 3 

Purdom  v.  Pavey  & Co 26  S.C.R.  412 3 

Q. 

Queen  City  Plate  Glass  Co.,  Re,  East- 

mure’s  Case 1 O.W.N.  863 377,  380 

Queen’s  College  v.  Jayne , 10  O.L.R.  319 625 

Quilter  v.  Mapleson 9 Q.B.D.  672 511,  547 


R. 


Railroad  v.  Delaney 

Rainy  Lake  Lumber  Co.,  In  re 

Rangeley  v.  Midland  R.W.  Co 

Raven  Lake  Portland  Cement  Co.,  Re, 
National  Trust  Co.  v.  Trusts  and 

Guarantee  Co 

Regina  v.  Bailey 

Regina  v.  Barnardo 

Regina  v.  Boyd 

Regina  v.  Cameron 

Regina  v.  France 

Regina  v.  Gyngall 

Regina  v.  Halifax  Electric  Tramway 

Co 

Regina  v.  Hicklin 

Regina  v.  James 

Regina  v.  Jones 

Regina  v.  Justices  of  Kent 

Regina  v.  Lambour  Valley  R.W.  Co. . 

Regina  v.  Laurence 

Regina  v.  Lushington,  Exp.  Otto 

Regina  v.  McIntosh 

Regina  v.  McNamara 

Regina  v.  Mayor  of  London 

Regina  v.  Murray 

Regina  v.  Neville 


102  Term.  289,  294, 

15  A.R.  749 

L.R.  3 Ch.  306,  310 


295. 


159 

649 

471 


Regina  v.  Norton. . . 
Regina  v.  Parker . . . 
Regina  v.  Patterson . 
Regina  v.  St.  Clair.  . 
Regina  v.  Smith 


Regina  v.  Stafford 

Regina  v.  Weir  (No.  3) 

Regina  v.  Weir  (No.  5) 

Regina  v.  Wright 

Regina  ex  rel.  Clancy  v.  Conway. 
Regina  ex  rel.  Clanc}^  v.  St.  Jean. 


Regina  ex  rel.  Grayson  v.  Bell . . 
Regina  ex  rel.  Halsted  v.  Ferris. 
Regina  ex  rel.  Moore  v.  Nagle . . 

Rex  v.  Bates 

Rex  v.  Beaver 

Rex  v.  Beeston 

Rex  v.  Benson 

Rex  v.  Corrigan 

Rex  v.  James 

Rex  v.  Key 


24  O.L.R.  286 280 

6CoxC.C.  29.. 500 

23  Q.B.D.  305 372,  602 

Q.R.  5 Q.B.  1,  4 Can.  Crim.  Cas. 

219 497,  500,  501,  504,  505,  507 

2 Can.  Crim.  Cas.  173 507 

1 Can.  Crim.  Cas.  321 488 

[1893]  2 Q.B.  232. . . .602,  607,  609,  611 

30N.S.R.  469 596 

L.R.  3 Q.B.  360 137 

12  Cox  C.C.  127 499 

[1898]  1 Q.B.  119 506 

24  Q.B.D.  181 '399 

22  Q.B.D.  463 51 

1 Can.  Crim.  Cas.  295 18 

[1894]  1 Q.B.  420 488 

28  O.R.  603 389,  391,  397 

20O.R.  489 18 

69L.T.R.  721 399 

27  U.C.R.  134.  391,  396 

Crawford  & Dix’s  Notes  of  Cases 

96,  97 511 

16  Cox  C.C.  59 499 

9C.  &P.  45 64 

26  O.R.  656 502 

27  A.R.  308 18 

17  Jur.  24,  22  L.J.N.S.Q.B.  116, 

16  Eng.  L.  & Eq.  221 606 

1 Can.  Crim.  Cas.  239 24 

3 Can.  Crim.  Cas.  262. . .500,  502,  507 

3 Can.  Crim.  Cas.  499,  503 507 

2 F.  & F.  320 500 

46  U.C.R.  85 263,  269,  272,  274 

46  U.C.R.  77,  at  pp.  81,  82 

269,  272,  274 

1 U.C.L.J.N.S.  130 270,  272 

6 U.C.L.J.N.S.  266 270,  272 

24  O.R.  507 271 

[1911]  1 K.B.  964 504 

9 O.L.R.  418 137,  141 

q T r?  KQO  ko 

[1908]  2 K.B.  270. 7. . '.  .’.500,  504,  505 

20  O.L.R.  99 504 

[1902]  1 K.B.  540  482 

1 Cr.  App.  R.  135 137 


xxvi]. 


CASES  CITED. 


XXYII 


Name  of  Case. 

Rex  v.  Komiensky 

Rex  v.  Larwood 

Rex  y.  Lee  Guey 

Rex  y.  Lovitt 

Rex  v.  Mayor,  etc.,  of  Winchester. . . . 

Rex  v.  O’ Gorman 

Rex  v.  Swyer 

Rex  v.  Thompson 

Rex  v.  Ward 

Rex  v.  Wener 

Rex  v.  Wheatly 

Rex  v.  White 

Rex  ex  rel.  Ivison  v.  Irwin 

Reynolds  v.  Accidental  Insurance  Co. 
Ricardo  v.  Maidenhead  Local  Board 

of  Health 

Rice  v.  Galbraith 

Richard  Evans  & Co.  Ltd.  v.  Astley.  . 

Richards  v.  Fry 

Richards  v.  Jenkins 

Richardson,  In  re 

Richardson  v.  Alpena 

Richardson  v.  Great  Eastern  R.  W.  Co. 

Rickard  v.  Robson 

Ridgeway  v.  Darwin 

Ridgway  v.  Wharton 

Riel  v.  The  Queen 

Roberts,  In  re 

Roberts,  In  re 

Roberts  v.  Hall 

Robertson,  Re 

Robertson  v.  French 

Robertson  v.  Robertson 

Robinson  v.  Canadian  Pacific  R.W. 

Co 

Robinson  v.  Grave 

Robinson  v.  Hardcastle 

Robinson  v.  Page 

Rochdale  Canal  Co.  v.  Radcliffe 

Rodhouse  v.  Mold 

Rogers  v.  Clifton 

Rogers  v.  Ingham 

Rolland  V.  La  Caisse  d’Economie 

Notre  Dame  de  Quebec 

Rosenbaum  v.  Belson 

Rosher,  In  re 

Ross  v.  Grand  Trunk  R.W.  Co 

Ross  v.  Township  of  London 

Rossiter  v.  Miller 

Rourke  v.  Robinson 

Routledge  v.  Dorril 

Rowland  v.  McCallum,  Re 

Royal  Canadian  Bank  v.  Cummer. . . . 

Royal  -Canadian  Bank  v.  Ross 

Rudge  v.  Richens 

Rush  and  Village  of  Bobcaygeon,  In 

re 

Russel  v.  Russel 


Where  Reported. 


Page. 


6 Can.  Crim.  Cas.  524 17,  18,  22 

Carthew  306 275 

15  O.L.R.  235 488,  489 

[1912]  A.C.  212 1,  3,  5 

7 A.  &E.  215 269 

18  O.L.R.  427 18 

10  B.  & C.  486 268 

17  Man.  L.R.  608 17,  22,  27 

4 A.  & E.  384 472 

6 Can.  Crim.  Cas.  406.  .17,  18,  21,  22 

2 Burr.  1125 499 

18  O.L.R.  640 489 

4 O.L.R.  192 340 

22  L.T.N.S.  820 57,  70 

2 H.  & N.  257 401 

26  O.L.R.  43 587 

[1911]  A.C.  674,  678 79 

7 A.  & E.  698 466 

17  Q.B.D.  544,  18  Q.B.D.  451. .. . 290 

L.R.  12  Eq.  398 148,  151 

40  Mich.  203 648 

1C.P.D.  342 125 

31  Beav.  244 105,  108,  110 

8 Yes.  65 511 

6H.L.C.  238 626 

10  App.  Cas.  675 595 

3Atk.  308,  312 510 

[1905]  1 Ch.  704 309 

1 O.R.  388 116,  602,  606,  607 

24  Gr.  442 406 

4 East  130,  at  pp.  135,  136 71 

25  Gr.  486 404,  405,  406,  407,  408 

23  O.L.R.  536 437,  439 

27  L.T.N.S.  648 477 

2 Bro.  C.C.  22 175 

3 Russ.  114,  121.  584 

18  Q.B.  287 471,  475,  483 

35  L.J.Ch.  67 176 

3 B.  & P.  587 157 

3 Ch.D.  351,  atp.  355 120 

24  S.C.R.  405 645,  649 

[1900]  2 Ch.  267 629 

26  Ch.D.  801 175 

10  O.R.  447 151 

20  O.L.R.  578,  23  O.L.R.  74.  .48,  49,  50 

3 App.  Cas.  1124 630 

[1911]  1 Ch.  480 147 

2Ves.  Jr.  356 175 

22  O.L.R.  418 \ . 390 

15  Gr.  627 450 

40U.C.R.  466 653 

L.R.  8 C.P.  358 152 

44  U.C.R.  199 391,  396 

1 Bro.  C.C.  269 449,  450 


S. 

St.  John  (Lord)  v.  Lady  St.  John  ....  11  Ves.  526,  531 607 

Sager  v.  Sheffer 2 O.W.N.  671 43,  45,  47 

Salford,  Mayor,  etc.,  of,  v.  County 

Council  of  Lancashire 25  Q.B.D.  384 53 


XXVIII 


CASES  CITED. 


[VOL. 


Name  of  Case.  Where  Reported.  Page. 

Salisbury,  Marquis  of,  v.  Ray 8 C.B.N.S.  193 ; 331 

Saltash,  Corporation  of,  v.  Jackman..  1 D.  & L.  851 338 

Saltfleet,  In  re  Local  Option  By-law 

of  the  Township  of 16  O.L.R.  293 339,  340,  342,  346 

348,  352,  359 

Sandys,  Exp 42  Ch.D.  98,  117 257 

Savill  Brothers  Limited  v.  Bethell.  . . [1902]  2 Ch.  523,  537 648 

Scott  v.  Canadian  Pacific  R.W.  Co. . . 19  Man.  L.R.  165 125 

Sealy,  Re 85  L.T.R.  451 90 

Sellars  v.  Village  of  Dutton 7 O.L.R.  646 .48,  50 

Shaftsbury  v.  Hannam Finch’s  Reports  323 372 

Shelford  v.  Louth  and  East  Coast  R. 

W.  Co 4 Ex.  D.  317 511 

Sheppard  v.  Sheppard 14  Gr.  174 406 

Sherer  v.  Bishop 4 Bro.  C.C.  55 89 

Shinglemeyer  v.  Wright 124  Mich.  230,  240 159 

Shoe  Machinery  Co.  v.  Cutlan [1896]  1 Ch.  108,  114 510 

Siddons  v.  Short 2 C.P.D.  572 478,  480 

Simmons  v.  “Liberal  Opinion”  (Lim- 
ited), Re  Dunn 27  Times  L.R.  278 494 

Simmons  v.  Mailing  Rural  District 

Council [1897]  2 Q.B.  433 561 

Simmons  v.  Montague [1909]  1 I.R.  87 451 

Sinclair  and  Town  of  Owen  Sound,  Re.  13  O.L  R.  447 340 

Singer  v.  Russell 25  O.L.R.  444 44 

Skelton  v.  Cole 1 DeG.  & J.  587 624 

Skinner  & Co.  v.  Shew  & Co. [1893]  1 Ch.  413 511 

Slattery  v.  Naylor 13  App.  Cas.  446 561 

Slingsby,  The 120  Fed.  Repr.  748 417 

Smith  v.  Chorley  District  Council [1897]  1 Q.B.  532 52 

Smith  v.  Mason 17  P.R.  444 376 

Smith  v.  Norton 7 U.C.L.J.O.S.  263  403 

Smith  v.  Smith 8 Sim.  353 295 

Smith  v.  Wood 3 Camp.  323,  14  P.R.  752.  . .155,  156, 

157,  159 

Smyth,  Ex  p 3 A.  & E.  719 401 

’'South  Eastern  R.W.  Co.  v.  Associated 
Portland  Cement  Manufacturers 

(1900)  Limited [1910]  1 Ch.  12 648 

South  Essex  Estuary  and  Reclamation 

Co.,  In  re L.R.  4 Ch.  215 565,  570 

South  Grenville  Election,  Jones’s 

Case H.E.C.  163,  176 278 

Standard  Realty  Co.  v.  Nicholson..  . . 24  O.L.R.  46 626 

Standard  Trading  Co.  v.  Seybold 1 O.W.R.  650 430,  431,  435 

Stapilton  v.  Stapilton 1 Atk.  2 309 

Starr  v.  Mayor,  etc.,  of  Exeter 3 Lev.  116 275 

State  v.  McKee 73  Conn.  18 137 

Steere  v.  Smith 2 Times  L.R.  131 45 

Stewart  v.  Pere  Marquette  R.W.  Co..  6 O.W.R.  724 410 

Stiles  v.  Galinski [1904]  1 K.B.  615 560 

Story,  Exp 12  C.B.  767,  777 391 

Stowell  v.  Robinson 3 Bing.  N.C.  928 583 

Stratheden,  Lord,  and  Campbell,  In 

re [1894]  3 Ch.  265 175,  181 

Stratton  v.  Vachon 44  S.C.R.  395 44,  45,  47,  585,  587 

Stroud  v.  Lawson [1898]  2 Q.B.  44 649 

Strong  v.  Lewis 1 Gr.  443,  445 404 

Studds  v.  Watson 28  Ch.D.  305 626 

Sturtevant  v.  Ford 4 M.  & G.  101 196 

Sussex,  The [1904]  P.  236 411 

Suter  v.  Merchants  Bank 24  Gr.  365. 653,  654 

Sutherland  v.  Grand  Trunk  R.W.  Co.  18  O.L.R.  139 437,  439 


XXVI.] 


CASES  CITED. 


XXIX 


Name  of  Case.  Where  Reported.  Page. 

Sutton  v.  Smith 13  Mo.  120,  123,  124 159 

Swain,  In  re [1905]  1 Ch.  669 173,  176 

Swainson  v.  North  Eastern  R.W.  Co.  . 3 Ex.  D.  341 411,  417 

Swan  v.  North  British  Australasian 

Co 32  L.J.  Ex.  273  649 

T. 


Tailby  v.  Official  Receiver 

Templer,  Ex  p 

Tennant  v.  Union  Bank 

Tennent  v.  Tennents 

Tewkesbury  Gas  Co.,  In  re 

Theobald  v.  Railway  Passengers  As- 
surance Corporation 

Thibaudeau  v.  Paul 

Thirkell,  Re,  Perrin  v.  Wood 

Thomas  v.  Brown 

Thomas  v.  Sutters 

Thompson  v.  Giles 

Thomson  v.  Shakespear 

Thorndyke  v.  Thorndyke 

Thornhill  v.  Thornhill 

Thorpe  v.  Richards 

Thuman  v.  Best 

Thuresson,  In  re 

Thynne  v.  Earl  of  Glengall 

Tone,  Conservators  of  the  River,  v. 
Ash 


13  App.  Cas.  523 238 

Saund.  &C.  169 113,  116 

19  A.R.  1 653 

L.R.  2 Sc.  & D.  6 309 

[1911]  2 Ch.  279,  [1912]  1 Ch.  1.. . 648 

10  Ex.  45 11 


26  O.R.  385 

.279,  288 

21  Gr.  492 

....  569 

1 Q.B.D.  714 

....  625 

[1907]  1 Ch.  10.  15.... 

....  600 

2 B.  & C.  422 

....  185 

1 DeG.  F.  & J.  399... 

...105, 

108,  109 

1 O.W.R.  11 

....  207 

4 Madd.  377 

. . .295, 

298,  299 

15  Gr.  403 

....  406 

97  L.T.R.  239 

....  629 

3 O.L.R.  271 

....  147 

2 H.L.C.  131 

....  625 

10  B.  & C.  349,  8 L.J.O.S.K.B. 

226 493 


Tooley  v.  Railway  Passenger  Assur- 
ance Co 2 Ins.  L.J.  275 11 

Toronto,  City  of,  v.  Schultz 19  O.W.R.  1013 554,  557 

Toronto  Cream  and  Butter  Co.  v. 


Crown  Bank 16  O.L.R.  400 648,  650,  653,  655 

Toronto  Public  Library  Board  v.  City 

of  Toronto 19  P.R.  329,  332 50 

Townshend’s  (Lord)  Settlement,  In 

re [1908]  1 Ch.  201 528 

Trevor  v.  Whitworth 12  App.  Cas.  409 261,  262 

Trew  v.  Railway  Passengers  Assur- 
ance Co 5 H.  & N.  211,  7 Jur.  N.S.  878. . . 70 

Trumble  v.  Hortin 22  A.R.  51 521 


Trusts  and  Guarantee  Co.  v.  Hart. ...  31  O.R.  414,  2 O.L.R.  251,  32  S.C. 

R.  553 207,  309 

Tyler,  In  re [1891]  3 Ch.  252 181 

Tyrrell  v.  Painton [1894]  P.  151 205,  206,  215 

Tytler  v.  Canadian  Pacific  R.W.  Co..  29  O.R.  654 2,  5 


U. 

Union  Steamship  Co.  Limited  v.  Clar- 

idge [1894]  A.C.  185 411,  425 

United  States  v.  Bennett 16  Blatchf.  (Circuit  Court)  338. . 137 

United  States  v.  Bradley 10  Peters  343 269 

United  States  Bank  v.  Dandridge.  ...  12  Wheat.  64 270 


V. 

Valentini  v.  Canali 24  Q.B.D.  166 455 

Yalletort  Sanitary  Steam  Laundry 

Co.,  In  re [1903]  2 Ch.  654 650 

Vandenbergh  v.  Spooner L.R.  1 Ex.  316 625 


XXX 


CASES  CITED. 


[VOL. 


Where  Reported. 


Page. 
. . 207 


Name  of  Case. 

Yandusen  v.  Young 1 O.W.R.  55 

Vano  v.  Canadian  Coloured  Cotton 

Mills  Co 21  O.L.R.  144 375 

Venner  v.  Sun  Life  Insurance  Co 17  S.C.R.  394 75,  81 

Vezina  v.  Will  H.  Newsome  Co 14  O.L.R.  658 3 

Victoria,  County  of,  v.  County  of 

Peterborough 15  A.R.  617,  627,  Cameron’s  Sup. 

Ct.  Cas.  608 199 

Victoria  Steamboats  Limited,  In  re.  . [1897]  1 Ch.  158 649 


W. 


Waldock  v.  Winfield 

Walker  v.  Jones 

Walker  v.  Maitland 

Wallis  y.  Andrews 

Wallis  v.  Solicitor-General  for  New 

Zealand 

Warburton  v.  Great  Western  R.W.  Co. 

Ward  v.  Robins 

Warmoll  v.  Young 

Warr  v.  Jolly 

Waterhouse  v.  Jameson 

Waters  v.  Merchants’  Louisville  In- 
surance Co , 

Waters  v.  Waters 

Waugh  v.  Waugh 

Weatherston  v.  Hawkins 

Webster’s  Estate,  In  re 

Welton  v.  Saffery 

Westbrook  v.  Australian  Royal  Mail 

Steam  Navigation  Co 

Western  National  Bank  of  City  of  New 

York  v.  Perez  Triana  & Co 

Westmeath’s  (Lord)  Case 

Weston  Local  Option  By-law,  Re  .... 

Wharton  v.  Masterman ....  

White,  In  re 

White  v.  Bastedo 

White  v.  Newcomb 

White  v.  Tomalin 

White  v.  Wilson 

Wicks  v.  Dowell  & Co.  Limited 

Wilkinson  v.  Alston 

William  Whiteley  Limited  v.  The  King 

Williams,  Re 

Williams,  Re 

Williams  v.  Jordan 

Williams  v.  Lake 

Williams  v.  Township  of  Raleigh 

Williston  v.  Lawson 

Wilson  v.  Kelland 

Winspear  v.  Accident  Insurance  Co. . . 

Winter  v.  Mouseley 

Wood  v.  Waud 

Wood  v.  Wood 

Woolrich,  In  re 

Worthing  Corporation  v.  Heather.  . . . 

Worthington  v.  Jeffries 

Wright  v.  Kerrigan 

Wright  v.  Lainson 

Wright  v.  Williams 


[1901]  2 K.B.  596 426 

L.R.  1 P.C.  50 147 

5 B.  & Aid.  171,  at  p.  175 69 

16  Gr.  624 207,  307 

[1903]  A.C.  173 176 

L.R.  2 Ex.  30 411 

15  M.  & W.  237,  242 466 

5 B.  & C.  660 324 

6 C.  & C,  497  157 

L.R.  2 H.L.  Sc.  29,  at  p.  38.  ....  570 

11  Peters  (S.C.)  213 69 

2 DeG.  & Sm.  591,  599 86 

2 My.  & K.  41 298 

1 T.R.  110 155,  157 

23  Ch.D.  737,  739 299 

[1897]  A.C.  299 258,  260 

23  L.J.N.S.C.P.  42  332,  338 

[1891]  1 Q.B.  304 6 

Jacob  251,  note  (c) 605 

9 O.W.R.  250 340 

[1895]  A.C.  186.  ..  , 177 

[1893]  2 Ch.  41 174 

15  Gr.  546 407 

25  App.  Div.  N.Y.  397,  401. . . ...  159 

19  O.R.  513 625,  629 

13  Ves.  87,  at  p.  91 86 

[1905]  2 K.B.  225 57,  68 

48  L.J.Q.B.  733 43,  45,  47 

101  L.T.R.  741 120 

5 O.L.R.  345 295 

7 O.L.R.  156 404,  407 

6 Ch.D.  517 624 

2 E.  & E.  349 629 

14  P.R.  50 332,  333,  338 

19  S.C.R.  673 625 

[1910]  2 Ch.  306.. 649 

6 Q.B.D.  42 57,  58,  66,  73 

2 B.  & Aid.  802,  at  p.  806 120 

3 Ex.  748 474 

57  L.J.N.S.  Ch.  1 7 

11  Ch.D.  663 295 

[1906]  2 Ch.  532,  at  p.  538 177 

L.R.  10  C.P.  379... 401 

[1911]  2 I.R.  301 78 

2 M.  & W.  739 324 

1 M.  & W.  77 466 


XXVI. 


CASES  CITED. 


XXXI 


Name  of  Case.  Where  Reported.  Page. 

Wyatt  v.  Attorney-General  of  Quebec . [1911]  A.C.  489 458,  465 

Wylson  v.  Dunn 34  Ch.D.  569 626 

Y. 

Yeap  Cheah  Neo  v.  Ong  Cheng  Neo. . L.R.  6 P.C.  381 105,  108,  110 

Yeates  v.  Reed 4 Blackf.  (Ind.)  463,  465 159 

Yorkshire  Woolcombers  Association 

Limited,  In  re [1903]  2 Ch.  284 649 

Young  y.  Travellers  Insurance  Co.  ...  80  Me.  244 11 


REPORTS  OF  CASES 


DETERMINED  IN  THE 

COURT  OF  APPEAL 

AND  IN  1HE 

HIGH  COURT  OF  JUSTICE  FOR  ONTARIO. 


[DIVISIONAL  COURT.] 

McMulkin  v.  Traders  Bank  of  Canada. 

Attachment  of  Debts — Money  Deposited  in  Bank  at  Branch  out  of  On- 
tario— Residence  of  Garnishees — Service  of  Attaching  Order — Locality 
of  Debt — Subrogation  of  Judgment  Creditor  to  Rights  of  Debtor — • 
Con.  Rules  162,  911  et  seq. — Extra-territorial  Recognition  of  Judgment 
—Residence  of  Debtor. 


D.  C. 
1912 

March  2. 


Under  Con.  Rules  911  et  seq.,  a debt  may  be  attached  to  answer  a judg- 
ment, (a)  if  the  garnishee  is  within  Ontario,  or  (6)  if  the  garnishee  is 
out  of  Ontario,  and  the  case  would  fall  within  one  or  more  of  the  clauses 
of  Con.  Rule  162  (as  to  service  of  original  process  out  of  Ontario)  if 
the  judgment  debtor  was  himself  seeking  to  assert  his  rights  within 
Ontario. 

The  money  attached  was  deposited  by  the  debtor  in  a branch  in  the  Prov- 
ince of  Alberta  of  a bank  having  its  head  office  in  Ontario.  The  attach- 
ing order  was  served  on  the  bank  at  the  head  office,  and  reached  the 
branch  in  Alberta  before  any  demand  by  the  debtor: — 

Held,  that  the  order  should  be  made  absolute. 

The  King  v.  Lovitt,  [1912]  A.C.  212,  distinguished  upon  the  ground  that 
the  Rules  as  to  attachment  of  debts  are  not  based  upon  the  locality  of 
the  debts. 

The  question  whether  the  judgment  of  an  Ontario  Court  would  be  accord- 
ed recognition  in  a foreign  country  is  not  one  to  be  considered  by  the 
'Court. 

Judgment  of  Finkle,  Co.  C.J.,  Oxford,  upon  the  trial  of  a garnishee  issue, 
reversed. 


An  appeal  by  the  plaintiff  (judgment  creditor)  from  the 
judgment  of  Finkle,  Co.  C.J.,  Oxford,  upon  the  trial  of  a garnishee 
issue. 

The  following  statement  is  taken  from  the  judgment  of  Mid- 
dleton, J. : — 


2 

ONTARIO  LAW  REPORTS.  [vol. 

D,  C. 
1912 

The  facts  are  not  in  dispute.  On  the  8th  August,  1911,  the 
plaintiff  recovered  a judgment  against  one  Couldridge  for  $211.33. 

McMulkin 

V. 

Traders 
Bank 
of  Canada 

On  the  17th  August,  1911,  the  plaintiff  obtained  a garnishee  order 
nisi,  attaching  any  debt  due  from  the  Traders  Bank  of  Canada, 
the  defendants  in  the  issue,  to  the  judgment  debtor.  This 
order  was  served  on  the  manager  of  the  Traders  Bank  of  Canada 
at  Ingersoll,  on  the  17th  August,  and  upon  the  manager  at  the 
head  office  at  Toronto,  on  the  18th  August. 

An  issue  was  directed  between  the  attaching  creditor  and  the 
garnishees  for  the  purpose  of  determining  whether,  at  the  time  of 
the  service  of  the  said  order,  there  was  any  amount  owing  from  the 
garnishees  to  the  judgment  debtor,  and  whether  the  garnishee 
order  “was  a valid  attachment  of  such  debt.” 

At  the  trial  the  learned  Judge  found  against  the  attaching 
creditor,  no /reasons  being  assigned. 

It  appeared  that,  at  the  time  of  the  recovery  of  judgment, 
the  judgment  debtor  had  $3,415  upon  deposit  in  the  branch  of 
the  Traders  Bank  of  Canada  at  Ingersoll.  This  sum  was  with- 
drawn, and  on  the  9th  August  was  deposited  with  the  branch 
of  the  bank  at  Calgary.  When  the  attaching  order  was  served, 
it  was  accompanied  by  a notice  addressed  to  the  bank,  warning 
the  bank  that  the  money  sought  to  be  attached  was  upon  deposit 
with  the  Calgary  branch.  The  general  manager  forwarded  the 
attaching  order  to  Calgary.  It  reached  the  Calgary  office  before 
banking  hours  on  the  24th.  Notwithstanding  this,  the  bank 
permitted  the  withdrawal  of  the  whole  $3,415,  and  it  was  upon  the 
same  day  redeposited  by  the  judgment  debtor  to  his  own  credit 
“in  trust;”  and,  later  on  in  the  same  day,  the  money  so  deposited 
was  again  withdrawn. 

February  22.  The  appeal  was  heard  by  a Divisional  Court 
composed  of  Falconbridge,  C.J.K.B.,  Teetzel  and  Middleton, 
JJ. 

J.  B.  Clarke,  K.C.,  for  the  appellant.  The  question  is,  whether 
the  order  binds  the  branch  of  the  bank  in  Alberta.  I submit  that 
it  does.  The  bank,  not  the  branch,  is  the  debtor. 

The  branch  is  merely  an  agent  of  the  bank  for 

certain  purposes.  The  bank  is  subject  to  the  jurisdic- 

tion of  the  Courts  here.  I refer  to  Tytler  v.  Canadian 
Pacific  R.W.  Co.  (1898),  29  O.R.  654;  Ferguson  v.  Carman  (1866), 

XXVI.] 


ONTARIO  LAW  REPORTS. 


3 


26  U.C.R.  26;  Prince  v.  Oriental  Bank  Corporation  (1878),  3 App. 
Cas.  325;  The  King  v.  Lovitt,  [1912]  A.C.  212.  The  test  is,  not 
the  situs  of  the  debt;  but,  could  the  debtor  sue  in  Ontario  to 
recover  the  debt  due  him  by  the  garnishees?  See  Con.  Rule  911.* 
R.  McKay,  K.C.,  for  the  respondents.  This  money  was  not 
a debt  in  Ontario  which  could  be  ordered  by  the  Ontario  Courts 
to  be  paid  over.  The  Traders  Bank  of  Canada  is  a corporation 
having  its  head  office  in  the  Province  of  Ontario,  but  it  is  domiciled 
in  every  Province  where  it  has  offices.  A judgment  from  this 
Court  would  not  have  the  required  effect  in  the  Province  of  Alberta. 
It  is  the  situs  of  the  debt  that  governs.  In  order  that  the  Ontario 
garnishment  process  may  apply,  the  debt  must  be  present  here 
in  Ontario.  I refer  to  Deacon  v.  Chadwick  (1901),  1 O.L.R.  346; 
Vezina  v.  Will  H.  Newsome  Co.  (1907),  14  O.L.R.  658;  Brennan  v. 
Cameron  (1910),  1 O.W.N.  430;  Pavey  v.  Davidson  (1896),  23 
A.R.  9;  S.C.,  sub  nom.  Purdom  v.  Pavey  & Co.  (1896),  26  S.C.R. 
412;  In  re  Maudslay  Sons  & Field,  Maudslay  v.  Maudslay  Sons  & 


D.  C. 
1912 

McMulkin 

V. 

Traders 
Bank 
of  Canada 


*911.(1)  The  Court  or  a Judge,  upon  the  ex  parte  application  of  the 
judgment  creditor,  either  before  or  after  the  oral  examination  mentioned 
in  Rules  900  to  904  and  910,  and  upon  affidavit  by  him  or  his  solicitor,  or 
some  other  person  aware  of  the  facts,  stating  that  judgment  has  been  re- 
covered, that  it  is  still  unsatisfied,  and  to  what  amount,  and  that  some 
third  person  is  indebted  to  the  judgment  debtor,  and  is  within  Ontario, 
may  order  that  all  debts  owing  or  accruing  from  the  third  person  (here- 
inafter called  the  garnishee)  to  the  judgment  debtor,  shall  be  attached 
to  answer  the  judgment  debt;  and  by  the  same  or  any  subsequent  order 
it  may  be  ordered  that  the  garnishee  appear  before  the  Court  or  a Judge 
or  before  such  officer  as  the  Court  or  Judge  shall  appoint,  to  shew  cause 
why  he  should  not  pay  the  judgment  creditor  the  debt  due  from  the  gar- 
nishee to  the  judgment  debtor,  or  so  much  thereof  as  may  be  sufficient  to 
satisfy  the  judgment  debt. 


(2)  Upon  a like  application  where  the  garnishee  is  not  within  Ontario, 
and  upon  its  being  made  to  appear  on  affidavit  that  the  garnishee  is  so 
indebted  to  the  judgment  debtor  and  that  the  debt  to  be  garnished  is  one 
for  which  the  garnishee  might  be  sued  within  Ontario  by  the  judgment 
debtor,  an  order  may  be  made  that  such,  debt  shall  be  attached  to  answer 
the  judgment  debt;  and,  by  the  same  or  any  subsequent  order,  leave  may 
be  given  to  serve  upon  the  garnishee,  or  in  such  manner  as  may  seem 
proper,  a notice  (which  may  be  embodied  in  the  order),  calling  upon  the 
garnishee  to  appear  before  the  Court  or  a Judge  or  before  such  officer 
as  the  Court  or  Judge  may  appoint,  to  shew  cause  why  he  should  not  pay 
the  judgment  creditor  the  debt  due  from  the  garnishee  to  the  judgment 
debtor,  or  so  much  thereof  as  may  be  sufficient  to  satisfy  the  judgment 
debt. 

(3)  The  order  allowing  the  notice  so  to  be  given  shall  limit  a time 
when  the  motion  is  to  be  heard,  having  regard  to  the  place  or  country 
where  or  within  which  the  notice  is  to  be  served. 

(4)  Where  the  garnishee  is  not  within  Ontario  and  is  neither  a British 
subject  nor  in  British  dominions,  notice  of  the  order  according  to  form 
No.  126,  and  not  the  order  itself  shall  be  served. 


4 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

McMulkin 

v. 

Traders 
Bank 
of  Canada 


Field,  [1900]  1 Ch.  602;  Attorney-General  for  Ontario  v.  Woodruff 
(1907),  15  O.L.R.  416,  [1908]  A.C.  508;  Parker  v.  Odette  (1894), 
16  P.R.  69,  Con.  Rule  911. 

Clarke,  in  reply. 

March  2.  The  judgment  of  the  Court  was  delivered  by  Middle- 
ton,  J.  (after  setting  out  the  facts  as  above) : — There  is  no  doubt 
that,  at  the  time  of  the  service  of  the  garnishee  order,  the  garnishees 
were  indebted  to  the  judgment  debtor.  The  only  question  is, 
whether  this  indebtedness  was  subject  to  attachment  at  the  in- 
stance of  the  judgment  creditor  in  the  Ontario  Courts.  This 
falls  to  be  determined  on  Con.  Rules  911  et  seq.  These  Rules  were 
validated  by  58  Viet.  ch.  13,  sec.  42,  and  59  Viet.  ch.  18,  sec.  15. 
No  notice  has  been  served,  as  required  by  sec.  60  of  the  Judicature 
Act,  if  it  is  intended  to  contend  that  this  legislation  is  ultra  vires 
of  Ontario. 


By  the  Rules  in  question,  it  is  plain  that  the  intention  was  to 
make  exigible  to  answer  a judgment  recovered  in  Ontario:  (a) 
any  indebtedness  to  the  judgment  debtor  where  the  garnishee 
was  within  Ontario;  or  ( b ) where  the  garnishee  was  not  within 
Ontario,  but  the  case  would  fall  within  the  provisions  of  Con. 
Rule  162  if  the  judgment  debtor  was  himself  seeking  to  assert  his 
rights  within  Ontario.  The  Rule  does  not  proceed  upon  any 
theory  as  to  the  situs  of  the  cause  of  action  to  be  taken  in  execu- 
tion, but  proceeds  upon  the  theory  that  the  creditor  has  a right  to 
be  subrogated  to  the  position  of  his  debtor,  and  to  assert,  for  the 
purpose  of  enabling  him  to  obtain  satisfaction  of  the  judgment, 
any  right  which  the  debtor  himself  could  assert.  If  the  garnishee 
is  within  Ontario  and  can  be  served  within  Ontario,  the  judgment 
creditor  is  given  the  right  to  collect  any  debt  due  by  him  to  the 
judgment  debtor.  If  the  garnishee  is  not  within  Ontario  and 
cannot  be  served  within  Ontario,  then  a debt  cannot  be  collected 
under  this  process  unless  it  falls  within  the  classes  enumerated 
in  Con.  Rule  162. 

This  narrows  the  question  for  determination  to  an  inquiry 
whether  the  debtor  could  himself  sue  in  Ontario  to  recover  the 
debt  due  him  by  the  garnishees. 


XXVI.  ] 


ONTARIO  LAW  REPORTS. 


5 


Before  the  decision  of  the  Privy  Council  in  The  King  v.  Lovitt, 
[1912]  A.C.  212,  no  one  would  have  doubted  this  right.  The 
question  in  that  case  was  not  one  between  the  bank  and  its 
customer.  What  was  there  discussed  was  the  right  of  New 
Brunswick  to  claim  succession  duty  with  respect  to  moneys  on 
deposit  in  the  St.  John  branch  of  the  Bank  of  British  North  America. 
The  head  office  of  the  bank  was  in  London,  England;  the  domicile 
of  the  testator  was  Nova  Scotia.  The  right  of  the  Province  to 
tax  was  said  to  be  limited  to  assets  within  the  Province.  It  was 
argued  that  the  situs  of  this  simple  contract  debt  was  either  at 
the  residence  of  the  debtor — i.e .,  where  its  head  office  was,  in 
London,  England — or  the  domicile  of  the  creditor,  i.e.,  Nova 
Scotia.  The  Province  claimed  that  the  debt  was  a debt  payable 
at  St.  John,  and  that  it  was  primarily  recoverable  at  St.  John; 
the  contract,  properly  understood,  being  a contract  to  be  imple- 
mented at  the  branch  of  the  bank  in  St.  John.  The  Privy  Council 
agreed  with  this,  and  thought  that  the  locality  of  the  debt  was  in 
truth  fixed  by  the  agreement  between  the  parties,  and  that  branch 
banks,  although  agencies  of  the  bank  itself,  for  certain  purposes, 
may  be  regarded  as  distinct  trading  bodies. 

Had  our  Rules  been  based  upon  the  locality  of  the  debt  to 
be  taken  in  execution,  this  judgment  would  be  conclusive  against 
the  attaching  creditor;  but,  if  I am  right  in  thinking  that  this 
is  not  the  test,  then  the  decision  has  no  application.  The  sole 
test  given  by  our  Rules  is  the  ability  to  serve  within  Ontario,  or 
the  ability  to  bring  the  case  within  Con.  Rule  162  if  service  cannot 
be  made  within  Ontario.  Had  the  contract  been  made  between 
two  residents  of  Calgary,  and  had  the  promise  been  to  pay  at 
Calgary  and  nowhere  else,  so  that  the  parties  had  given  as  definite 
and  complete  a locality  to  the  debt  as  is  possible  in  the  case  of 
simple  contract  debts,  and  had  the  debtor  thereafter  moved 
within  Ontario,  then  the  debt  would  none  the  less  be  liable  to 
attachment  under  our  Rule,  which  merely  requires  the  existence 
of  a debt  and  presence  of  the  debtor  within  Ontario.  The  debtor 
would  not  be  exempt  from  suit  at  the  instance  of  his  original  cred- 
itor if  found  and  served  within  Ontario,  because  the  Courts  of 
Ontario  have  universal  jurisdiction  in  all  personal  actions,  subject 
only  to  their  ability  to  effect  service  within  their  own  jurisdiction: 
Tytler  v.  Canadian  Pacific  R.W.  Co.,  29  O.R.  654. 


D.  C. 
1912 

McMulkin 

v. 

Traders 
Bank 
of  Canada 

Middleton,  J. 


6 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

McMulkin 

v. 

Traders 
Bank 
of  Canada 

Middleton,  J. 


Upon  the  argument,  much  was  made  of  the  difficulty  that 
might  in  some  cases  arise  if  the  Courts  of  Ontario  were  to  assume 
authority  to  take  in  execution  a debt  of  this  kind,  because,  it  was 
suggested,  foreign  Courts  might  not  accord  to  the  judgment  of 
the  Ontario  Court  any  extra-territorial  recognition.  It  is  a suf- 
ficient answer  to  this  to  point  out  that  this  is  a question  of  policy, 
affecting  those  who  make  the  law,  and  that  it  cannot  be  considered 
by  the  Courts,  who  are  called  upon  to  administer  the  law  as  they 
find  it:  Western  National  Bank  of  City  of  New  York  v.  Perez 

Triana  & Co.,  [1891]  1 Q.B.  304. 

But  it  is  not  likely  that  in  this  case  any  such  question  can 
arise,  because,  at  the  time  of  the  original  suit,  the  judgment 
debtor  was  resident  within  Ontario,  and  he  appears  to  be  still 
here,  as  he  was  served  with  a notice  of  this  appeal  at  Ingersoll. 

The  appeal  should  be  allowed,  and  the  garnishees  should  be 
directed  to  pay  to  the  judgment  creditor  sufficient  to  satisfy  the 
judgment  debt  and  the  costs  of  the  attachment  proceedings,  of 
the  issue,  and  of  this  appeal. 


[DIVISIONAL  COURT.] 

D-  c-  Fremont  v.  Fremont. 

1912 

Husband  and  Wife — Alimony — Separation  Deed — Payment  of  Gross  Sum — 

March  4 Absence  of  Provision  for  Maintenance  of  Wife. 

By  the  terms  of  a separation  deed,  husband  and  wife  agreed  to  live  apart,, 
and  each  agreed  not  to  take  any  proceedings  against  the  other  for  resti- 
tution of  conjugal  rights  and  not  to  annoy  or  interfere  with  the  other 
in  any  manner  whatsoever;  the  husband  agreed  to  pay  the  wife  $250; 
the  wife  agreed  to  pay  her  own  debts,  save  three  named  accounts,  and  to 
support  the  two  children.  No  provision  was  made  in  the  deed  for  the 
maintenance  of  the  wife;  she  did  not  covenant  not  to  claim  alimony; 
nor  did  she  covenant  to  maintain  herself:  — 

Held,  that  the  sum  of  $250  could  not  be  regarded  as  intended  for  the 
maintenance  of  the  wife:  it  was  not  so  stipulated  in  the  deed;  and, 
apart  from  the  fact  that  the  sum  was  inadequate  for  that  purpose,  it 
might  have  been  a payment  made  to  induce  the  wife  to  assume  care  of 
the  children. 

Atwood  v.  Atwood  (1893-4),  15  P.R.  425,  16  P.R.  50,  considered. 

Held,  also,  that  the  agreement  to  live  apart  did  not  relieve  the  husband 
from  his  obligation  to  maintain  his  wife;  and,  no  provision  having  been 
made  for  her  separate  maintenance,  she  was  entitled  to  alimony. 
Judgment  of  Clute,  J.,  affirmed. 

Appeal  by  the  plaintiff  from  the  judgment  of  Clute,  J., 
at  the  trial,  on  the  13th  December,  1911,  awarding  the  plaintiff 
alimony. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


7 


The  marriage  took  place  on  the  16th  May,  1904.  The  parties  D*  c- 

cohabited  until  the  16th  November,  1906,  upon  which  day  a 

separation  agreement  was  entered  into,  since  when  the  plaintiff  Fremont 

V. 

had  been  maintaining  herself  and  her  two  children.  Fremont 

The  trial  Judge  found,  upon  conflicting  evidence,  that  the 
plaintiff  was  justified  in  leaving  her  husband  by  reason  of  his 
cruelty  and  misconduct. 

February  23.  The  appeal  was  heard  by  a Divisional  Court 
composed  of  Falconbridge,  C.J.K.B.,  Teetzel  and  Middleton, 

JJ. 

G.  H.  Watson,  K.C.,  for  the  defendant,  argued  that  the  sepa- 
ration agreement  entered  into  between  the  plaintiff  and  the  de- 
fendant was  a complete  bar  to  the  action:  Bishop  v.  Bishop, 

[1897]  P.  138,  at  p.  149;  Clark  v.  Clark  (1885),  10  P.D.  188; 

Barry  v.  Barry,  [1901]  P.  87.  The  payment  of  the  $250  by  the 
husband  to  the  wife  freed  the  husband  from  any  obligation  for 
maintenance;  and  the  adequacy  or  inadequacy  of  this  sum  made 
no  difference:  Eastland  v.  Burchell  (1878),  3 Q.B.D.  432;  Biffin 
v.  Bignell  (1862),  7 Ex.  877.  The  wife’s  maintenance  having  been 
provided  for,  she  cannot  sue,  any  more  than  could  a creditor 
for  necessaries  supplied  to  her,  she  having  no  authority  to  pledge 
his  credit.  Counsel  referred  to  McGregor  v.  McGregor  (1888), 

21  Q.B.D.  424;  Hart  v.  Hart  (1881),  18  Ch.D.  670;  Atwood  v. 

Atwood  (1893-4),  15  P.R.  425,  16  P.R.  50;  Lush  on  Husband 
and  Wife,  3rd  ed,  p.  417  et  seq.,  p.  487  et  seq.;  Wood  v.  Wood 
(1887),  57  L.J.N.S.  Ch.  1. 

R.  McKay,  K.C.,  for  the  plaintiff,  cited  Laf ranee  v.  Lafrance 
(1898),  18  P.R.  62,  and  Beatty  v.  Beatty  (1909),  1 O.W.N.  243. 

Watson,  in  reply. 

March  4.  The  judgment  of  the  Court  was  delivered  by 
Middleton,  J.: — The  sole  question  argued  before  us  was  as  to 
whether  the  provisions  of  the  separation  deed  preclude  the  action. 

By  the  terms  of  this  deed,  the  parties  agree  to  live  separate 
from  each  other,  and  each  agrees  not  to  take  any  proceedings 
against  the  other  for  restitution  of  conjugal  rights  or  to  annoy 
or  interfere  with  the  other  in  any  manner  whatsoever.  The 
husband  agrees  to  pay  the  wife  $250 — $50  in  cash  and  the  balance 
secured  by  forty  promissory  notes  for  $5  each,  payable  monthly. 


8 

D.  C. 
1912 

Fremont 

v. 

Fremont 

Middleton,  J. 


ONTARIO  LAW  REPORTS.  [vol. 

The  wife  agrees  to  pay  her  own  debts,  save  three  named  accounts, 
and  to  support  the  two  children. 

It  is  to  be  observed  that  there  is  no  provision  in  this  deed 
relating  to  the  maintenance  of  the  wife.  She  does  not  covenant 
not  to  claim  alimony  from  her  husband,  nor  does  she  covenant  to 
maintain  herself.  The  learned  trial  Judge  has  taken  the  view 
that  the  mere  agreement  to  live  separately  does  not  relieve  the 
husband  from  his  obligation  to  support  and  maintain  his  wife. 
With  this  we  agree. 

A husband,  by  the  act  of  marriage,  undertakes  to  maintain 
and  keep  his  wife,  unless  she  commits  adultery;  and,  when  she 
is  living  apart  from  him  under  circumstances  which  justify  the 
separation,  he  is  bound  to  maintain  her,  unless  she  has  expressly 
renounced  her  rights,  or  she  has  such  means  of  her  own  as  make 
it  unnecessary  for  him  to  maintain  her.  If  the  husband  fails 
to  maintain  her,  she  has  what  has  been  called  “authority  of 
necessity”  to  pledge  her  husband’s  credit.  Mr.  Watson  is 
probably  right  when  he  takes  the  position  that  the  same  test 
can  be  applied  to  determine  the  wife’s  right  to  alimony  as  in  the 
case  of  an  action  brought  against  the  husband  by  one  who  has 
supplied  his  wife  with  necessaries;  the  creditor  in  the  latter 
case  deriving  his  claim  entirely  from  the  wife’s  implied  authority. 

The  earlier  cases  made  the  adequacy  of  the  provision  of  the 
husband  for  his  wife’s  maintenance  the  test  of  the  limit  of  her 
authority.  The  later  cases  have  departed  from  this  rule;  and 
unless  the  wife  is  entitled  to  relief  by  reason  of  fraud  or  duress, 
she  is  now  regarded  as  able  to  make  her  own  terms,  and  to  agree 
to  accept  a stipulated  allowance  as  being  adequate  for  her  main- 
tenance. 

In  this  case  there  is  no  provision  whatever  for  maintenance, 
and  there  has  been  no  release  by  the  wife  of  her  right  to  be  main- 
tained. The  wife  is  entitled  to  be  separately  maintained,  not 
merely  because  the  husband  has  agreed  to  her  living  apart,  but 
also  because  the  misconduct  found  by  the  Judge  justifies  a sepa- 
ration. 

The  case  falls  within  the  words  of  Lush,  J.,  in  Eastland  v. 
Burchett,  3 Q.B.D.  432,  at  pp.  435,  436:  “If  he  wrongfully  com- 
pels her  to  leave  his  home,  he  is  bound  to  maintain  her  elsewhere, 
and  if  he  makes  no  adequate  provision  for  this  purpose,  she  be- 


XXVI.  ] 


ONTARIO  LAW  REPORTS. 


9 


comes  an  agent  of  necessity  to  supply  her  wants  upon  his  credit. 
In  such  a case,  inasmuch  as  she  is  entitled  to  a provision  suitable 
to  her  husband’s  means  and  position,  the  sufficiency  of  any  allow- 
ance which  he  makes  under  these  circumstances,  is  necessarily 
a question  for  the  jury.  Where,  however,  the  parties  separate 
by  mutual  consent,  they  may  make  their  own  terms;  and  so 
long  as  they  continue  the  separation,  these  terms  are  binding  on 
both.” 

Here  the  parties  have  not  made  their  own  terms  for  the  sepa- 
rate maintenance  of  the  wife.  The  husband  has  made  no  ade- 
quate provision  for  her,  and  she  is  justified  in  resorting  to  the 
Court  for  an  alimentary  allowance. 

This  case  differs  from  any  reported  decision;  as  in  all  the 
reported  cases  where  there  was  separation,  either  voluntary  or 
on  account  of  the  husband’s  misconduct,  the  separation  deed  did 
contain  an  alimentary  provision.  It  is  impossible  to  regard  the 
lump  sum  of  $250  as  being  intended  for  the  maintenance  of  the 
wife.  The  deed  does  not  so  stipulate;  and,  apart  from  the  fact 
that  that  sum  is  clearly  inadequate  for  this  purpose,  it  may  have 
been  a payment  made  to  induce  the  wife  to  assume  care  of  the 
children. 

In  Atwood  v.  Atwood,  15  P.R.  425,  the  Chancellor  says:  “A 
separation  deed  may  be  well  upheld  by  the  payment  of  a sum 
in  gross,  and  a provision  to  arise  de  anno  in  annum  is  not  essen- 
tial.” (See  also  the  same  case  in  appeal,  16  P.R.  50.) 

No  authority  is  referred  to,  and  I can  find  no  case  in  which 
such  a provision  was  made.  A lump  sum  so  paid,  enough  to 
produce  an  adequate  income  or  to  supplement  the  wife’s  own  in- 
come, might  well  be  sufficient;  but  a sum  such  as  that  paid 
here  would  be  so  grossly  inadequate  as  to  afford  in  itself  conclu- 
sive evidence  either  of  duress  or  improvidence. 

In  this  case  it  is  sufficient  to  say  that  upon  the  deed  itself 
the  sum  is  not  accepted  in  lieu  of  alimony. 

The  appeal  should  be  dismissed  with  costs. 


D.C, 

1912 

Fremont 

v. 

Fremont 

Middleton,  J. 


10 


ONTARIO  LAW  REPORTS. 


[VOL. 


[IN  THE  COURT  OF  APPEAL.] 

Wallace  v.  Employers’  Liability  Assurance  Corporation. 

Accident  Insurance — Temporary  Total  Disability — Double  Indemnity — 
“Riding  as  a Passenger” — Injury  to  Assured  on  Highway  after  Alight- 
ing from  Street  Car. 

The  judgment  of  Meredith,  C.J.C.P.,  25  O.L.R.  80,  upon  the  facts  there 
stated,  was  affirmed  as  to  total  disability  and  reversed  as  to  double 
indemnity — it  being  held,  that  the  plaintiff  was  not  “riding  as  a passen- 
ger” upon  the  street  car  from  which  he  had  alighted  when  he  received 
the  injuries  upon  which  his  claim  to  the  double  indemnity  was  based. 

Appeal  by  the  defendants  from  the  judgment  of  Meredith, 
C.J.C.P.,  25  O.L.R.  80,  in  an  action  upon  an  accident  insurance 
policy,  in  favour  of  the  plaintiff’s  claim  for  temporary  total 
disability  and  his  further  claim  for  double  indemnity,  upon  the 
ground  that,  when  he  sustained  the  accident  in  respect  of  which 
he  claimed,  he  was  “riding  as  a passenger”  upon  a public  con- 
veyance. 

January  23.  The  appeal  was  heard  by  Moss,  C.J.O.,  Garrow, 
Maclaren,  Meredith,  and  Magee,  JJ.A. 

N.  W.  Rowell,  K.C.,  for  the  defendants,  argued  that  the 
plaintiff  was  not  “riding  as  a passenger”  when  the  accident 
occurred.  He  had  alighted,  and  was  merely  entitled  to  the  rights 
of  a person  on  the  public  highway.  The  word  “passenger” 
implies  an  intention  to  travel,  while  the  plaintiff  was  at  his 
journey’s  end,  and  was  on  property  not  controlled  by  the  railway 
company:  Booth’s  Street  Railway  Law  (1892),  sec.  326;  see  note 
on  p.  445  and  case  of  Creamer  v.  West  End  St.  R.W.  Co.  (1892), 
31  N.E.  Repr.  391,  there  cited;  also  Platt  v.  Forty-Second  St.  and 
Grand  St.  Ferry  R.R.  Co.  (1874),  2 Hun  (N.Y.)  124.  On  the 
question  of  intention,  he  referred  to  Am.  & Eng.  Encyc.  of  Law,  2nd 
ed.,  vol.  1,  p.  305,  and  cases  there  cited,  especially  Hendrick  v.  Em- 
ployers’ Liability  Assurance  Corporation  (1894),  62  Fed.  Repr.  893. 
He  referred  particularly  to  the  case  of  Anable  v.  Fidelity  and 
Casualty  Co.  of  N.Y.  (1906),  63  Atl.  Repr.  92,  affirmed  (1907), 
74  N.J.L.  686.  He  also  referred  to  JZtna  Life  Insurance  Co.  v. 
Vandecar  (1898),  86  Fed.  Repr.  282.  On  the  other  point  in  the 
case,  the  evidence,  while  somewhat  conflicting,  shewed  that  the 
plaintiff  was  not  wholly  disabled  by  the  accident,  as  he  assisted 
his  wife  in  looking  after  the  heating  of  the  premises  of  which 


C.  A. 
1912 

March  6 


XXVI.] 


ONTARIO  LAW  REPORTS. 


11 


they  jointly  had  a lease,  and  in  the  buying  of  necessary  stores, 
so  that  he  was  not  entitled  to  the  benefits  under  the  policy  arising 
from  total  disability:  Am.  & Eng.  Encyc.  of  Law,  2nd  ed.,  vol.  1, 
p.  336,  and  cases  there  cited. 

D.  Urquhart,  for  the  plaintiff,  argued  that  there  was  ample 
evidence  to  support  the  finding  of  the  learned  trial  Judge  that  the 
plaintiff’s  injury  wholly  incapacitated  him  from  business:  Young 
v.  Travelers  Insurance  Co.  (1888),  80  Me.  244;  Hooper  v.  Acci- 
dental Death  Insurance  Co.  (1860),  5 H.  & N.  546.  On  the  other 
point,  reference  was  made  to  Theobald  v.  Railway  Passengers 
Assurance  Corporation  (1854),  10  Ex.  45,  as  the  earliest  case  on 
the  subject.  That  case  was  followed  in  Powis  v.  Ontario  Accident 
Insurance  Co.  (1901),  1 O.L.R.  54,  and  shews  that  a passenger 
remains  a passenger  until  he  has  safely  landed  at  his  destination. 
The  plaintiff  could  not  be  said  to  have  alighted  safely  from  the 
car  until  he  had  got  a foot-hold  upon  the  street  which  he  could 
maintain.  Reference  was  made  to  the  following  cases  and  authori- 
ties: Nellis  on  Street  Railways,  2nd  ed.,  secs.  260,261;  Northrup 
v.  Railway  Passenger  Assurance  Co.  (1871),  43  N.Y.  516;  May  on 
Insurance,  4th  ed.,  secs.  521,  524-529  (inch);  Tooley  v.  Railway 
Passenger  Assurance  Co.  (1873),  2 Ins.  L.J.  275. 


C.  A. 
1912 

Wallace 

v. 

Employers’ 

Liability 

Assurance 

Corpora- 

tion 


Rowell,  in  reply,  argued  that  the  cases  cited  on  behalf  of  the 
respondent  were  not  applicable,  and  that  the  Anable  case  covered 
the  whole  ground. 

i 

March  6.  Maclaren,  J.A. : — This  is  an  appeal  by  the  de- 
fendants from  a judgment  of  Meredith,  C.J.,  without  a jury, 
awarding  the  plaintiff  $1,300  for  26  weeks’  total  disability  from 
injuries  received  after  alighting  from  a street  car  in  Toronto. 
The  defendants  had  issued  a policy  in  the  plaintiff’s  favour, 
insuring  him  against  injuries  for  $25  a week  for  “ temporary 
total  disability;”  the  amount  to  be  $50  a week  if  the  injuries 
were  sustained  “ while  riding  as  a passenger  in  or  upon  a public 
conveyance.” 

The  claim  was  resisted  on  the  ground  that  the  plaintiff’s 
illness  and  disability  were  caused  not  by  the  alleged  injury,  but 
were  due  to  locomotor  ataxia  or  an  aneurism.  The  trial  Judge 
found  for  the  plaintiff  on  this  issue;  and,  although  urged  in  the 
reasons  for  appeal,  it  was  abandoned  in  the  argument  before  us. 


12 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Wallace 

v. 

Employers’ 

Liability 

Assurance 

Corpora- 

tion 

Maclaren,  J.A. 


Another  ground  of  defence  was,  that  the  plaintiff  was  a com- 
mercial traveller,  but  before  the  accident  in  question  he  had  ceased 
to  be  such,  and  had  become  the  keeper  of  a boarding-house,  and 
had  followed  this  business  during  the  period  claimed  for.  “ Tem- 
porary total  disability’ ’ is  defined  in  the  policy  as  arising  from 
injuries  resulting  in  the  “ assured  being  immediately,  continuously, 
and  wholly  disabled,  and  thereby  prevented  from  transacting 
any  and  every  kind  of  business  pertaining  to  his  occupation.” 
The  trial  Judge  found  as  a fact  that  the  boarding-house  business 
was  his  wife’s,  and  not  his;  and  that  the  trifling  assistance  he 
gave  her  was  not  sufficient  to  affect  his  claim.  This  finding 
seems  to  be  amply  justified  by  the  evidence,  and  the  appeal  on 
this  ground  should  be  dismissed. 

The  third  ground  of  appeal  is  more  serious.  It  is  contended 
by  the  defence  that,  even  if  the  plaintiff  were  entitled  to  $25  a 
week,  he  is  not  entitled  to  $50  a week,  or  the  double  allowance, 
as  his  injuries  were  not  sustained  while  he  was  “ riding  as  a pas- 
senger in  or  upon  a public  conveyance.” 

The  word  “ passenger”  had  been  variously  defined,  and  it 
is  difficult  to  frame  a definition  that  would  be  of  general  applica- 
tion. It  usually  means  one  who  travels  or  is  carried  in  a vessel, 
coach,  railway  or  street  car,  or  other  public  conveyance,  entered 
by  fare  or  contract  express  or  implied.  The  precise  time  at  which 
the  traveller  becomes  a passenger  or  ceases  to  be  such  depends 
upon  the  facts  of  the  particular  case.  If  the  carrier  owns  or  con- 
trols the  station,  platform,  or  other  premises  where  the  journey 
begins  or  terminates,  the  relation  of  carrier  and  passenger  may 
begin  sooner  and  terminate  later  than  in  the  case  of  a tram  or 
street  car,  where  the  carrier  has  no  control  over  the  place  of  de- 
parture or  arrival.  In  the  present  case  we  have  not  to  determine 
whether  the  plaintiff  had  ceased  to  be  a passenger  with  reference 
to  the  Toronto  Railway  Company  when  he  received  the  injury 
complained  of,  but  whether  at  that  time  he  was  “ riding  as  a pas- 
senger in  or  upon  a public  conveyance.” 


The  facts  of  the  case  as  given  by  the  plaintiff  in  his  evidence 
are  quite  simple.  He  was  a passenger  on  an  open  street  car  in 
the  city  of  Toronto,  which  stopped  to  let  him  off  at  the  regular 
stopping  place,  just  opposite  his  home.  When  he  stepped  on  the 
ground,  an  automobile  going  in  the  same  direction  was  about 


XXVI.] 


ONTARIO  LAW  REPORTS. 


13 


to  run  him  down,  and  to  save  himself  he  tried  to  get  on  the  street 
car  again,  which  by  this  time  was  in  motion.  He  says  he  reached 
out  to  catch  hold  of  the  handle  of  the  car,  and  was  jerked  around, 
and  fell  between  the  car  and  automobile,  his  head  striking  the 
side  of  the  car  as  he  fell. 

We  were  not  referred  to  any  Canadian  or  English  case  precisely 
in  point;  but  there  are  a number  of  American  cases  that  are 
very  similar  to  the  present  one. 

In  Creamer  v.  West  End  St.  R.W.  Co.  (1892),  156  Mass.  320, 
a passenger  had  taken  one  or  two  steps  from  where  he  touched  the 
ground  on  leaving  his  car  and  was  struck  by  another  car.  The 
Court  said:  “We  are  of  opinion  that  he  was  not  a passenger 
when  the  accident  occurred,  and,  that  he  ceased  to  be  a passenger 
when  he  alighted  upon  the  street  from  his  car.  The  street  is  in 
no  sense  a passenger  station,  for  the  safety  of  which  a street  railway 
company  is  responsible.  When  a passenger  steps  from  the  car 
upon  the  street,  he  becomes  a traveller  upon  the  highway,  and 
terminates  his  relations  and  rights  as  a passenger,  and  the  railway 
company  is  not  responsible  to  him  as  a carrier  for  the  condition 
of  the  street,  or  for  his  safe  passage  from  the  car  to  the  sidewalk.” 

In  Platt  v.  Forty-Second  St.  and  Grand  St.  Ferry  R.R.  Co.,  2 Hun 
(N.Y.)  124,  the  plaintiff  had  left  the  company’s  car  and  was  pass- 
ing the  horses  which  had  been  drawing  it,  when  one  of  them 
injured  her.  It  was  held  that  she  had  ceased  to  be  a passenger 
on  tfee  car,  and  that  the  liability  of  the  company,  if  any,  was  not 
that  of  a common  carrier,  but  depended  upon  the  principles 
that  apply  to  all  persons  lawfully  using  the  highway. 


C.  A. 
1912 

Wallace 

v. 

Employers  ’ 
Liability 
Assurance 
Corpora- 
tion 

Maclaren,  J.A. 


Anable  v.  Fidelity  and  Casualty  Co.  of  N.Y.,  73  N.J.L.  320 
(1906),  was  an  action  on  a policy  in  the  same  terms  as  the  one  in 
this  case — providing  for  double  indemnity  for  an  injury  “while 
riding  as  a passenger  in  or  upon  a public  conveyance.”  While 
the  train  was  at  a station,  the  assured  stepped  on  the 
station  platform  to  buy  a paper.  The  train  started,  and  the  as- 
sured grasped  the  handrail  of  one  of  the  cars,  but  fell,  and  the  last 
car  passed  over  his  body,  killing  him  instantly.  The  trial  Judge 
held  that  the  rights  of  the  parties  must  be  ascertained  by  the 
plain  natural  meaning  of  the  language  used;  that  he  was  not  in  a 
car  nor  on  a car,  nor  on  any  part  of  a train  at  the  time  of  the  injury; 
that  he  was  insured  not  simply  as  a passenger,  but  was  entitled 


14 

C.A. 

1912 

Wallace 

v. 

Employers’ 

Liability 

Assurance 

Corpora- 

tion 

Maclaren,  J.A. 


ONTARIO  LAW  REPORTS.  [vol. 

to  the  double  indemnity  only  if  the  injury  was  received  while  within 
or  on  the  car  or  other  public  conveyance,  which  was  considered  a 
less  hazardous  risk  than  while  in  the  act  of  getting  on  or  off, 
which  might  involve  a considerable  degree  of  peril.  This  judg- 
ment was  affirmed  and  approved  unanimously  by  the  appellate 
Court  of  eleven  Judges:  74  N.J.L.  686  (1907). 

The  reasoning  in  this  last  case  commends  itself  to  my  judgment. 
In  the  present  case  the  plaintiff  was  not  in  fact  either  in  or  on  the 
car  when  he  received  the  injury.  If  he  had  been,  he  would  not 
have  been  injured.  It  is  common  knowledge  that  the  vast 
majority  of  street  car  accidents  to  passengers  occur  in  connection 
with  entering  or  leaving  the  car,  injuries  to  those  in  or  on  the  cars 
being  limited  to  the  rarer  cases  of  collisions  or  the  car  running 
off  the  track.  I do  not  think  that  the  language  of  the  policy 
should  be  strained  so  as  to  cover  a risk  which  does  not  come  within 
its  terms;  and  a risk  for  which  the  proper  premium  was  not  paid. 

I am  further  of  opinion  that  the  plaintiff  was  not  even  a “ pas- 
senger/’ within  the  meaning  of  the  policy,  at  the  time  he  received 
the  injury.  He  had  fully  completed  the  journey  for  which  he 
had  entered  the  car  and  paid  his  fare.  The  car  had  stopped  at 
his  request  at  the  very  spot  at  which  he  desired  to  alight,  and  with 
which  he  was  very  familiar,  as  it  was  almost  at  his  own  door. 
He  had  completely  separated  himself  from  the  car  and  was  se- 
curely landed  on  the  roadway.  His  subsequent  attempt  to  lay 
hold  of  the  car  and  get  upon  its  steps  was  not  for  the  purpose  of 
resuming  his  journey  or  again  becoming  a passenger  on  the  car, 
and  was  in  no  way  connected  with  his  having  been  a passenger 
a short  time  previously.  His  position  was  the  same  as  that  of 
any  foot-passenger  on  the  street  who  might  find  himself  in  the 
same  peril,  and  might  try  to  take  refuge  from  the  deadly  auto- 
mobile. But  I do  not  think  it  is  necessary  to  decide  whether, 
at  the  time  of  the  accident,  he  was  a passenger  or  not;  it  is  suffi- 
cient that  he  was  not  then  “ riding  as  a passenger  in  or  upon  a 
public  conveyance.” 

In  my  opinion,  the  plaintiff  is  entitled  only  to  single  and 
not  to  double  indemnity,  and  the  $1,300  awarded  him  should 
be  reduced  to  $650. 

There  should  be  no  costs  of  the  appeal. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


15 


Meredith,  J.A. : — The  first  question  is,  whether  the  plaintiff, 
at  the  time  of  his  injury,  was  ‘'riding  as  a passenger  in  or  upon” 
the  street  car;  and  is  not  the  broader  one  whether,  at  that  time, 
he  might  be  considered  merely  a passenger  as  against  the  railway 
company. 

He  had  been  a passenger  riding  in  and  upon  the  street  car, 
but  had  reached  his  destination,  the  car  had  been  stopped  to  let 
him  down,  and  he  had  alighted  upon  the  public  road,  severing 
entirely  all  actual  connection  between  himself  and  it;  but,  being 
put  in  imminent  danger  by  a rapidly  approaching  motor  car, 
he  caught  at  the  street  car  again,  though  it  had  by  that  time  been 
started  again  and  was  in  motion;  and,  in  endeavouring  to  escape 
injury  from  the  motor  car  by  getting  upon  the  street  car,  fell,  or 
was  thrown  down,  coming  in  contact  with  the  moving  cars, 
and  so  was  severely  injured.  His  purpose  in  trying  to  get  upon 
the  street  car  again  was  not  to  resume  his  journey;  that  was  ended; 
nor  was  it  to  begin  a new  journey;  it  was  solely  to  escape  injury 
by  the  negligently-driven  motor  car.  It  is  idle  to  say  that  there 
was  negligence  on  the  part  of  the  railway  company,  if  that  would 
make  any  difference;  how  could  their  servants  foresee  and  be 
blameable  for  the  misconduct  of  the  driver  of  the  motor  car?  It 
was  at  the  plaintiff’s  instance,  and  upon  his  signal,  that  the  street 
car  was  stopped  at  this  alighting  place;  an  entirely  proper  place 
to  stop  for  that  purpose;  the  danger  was  something  not  foreseen 
by  the  plaintiff  or  any  one  else,  because  doubtless  not  apparent 
until  the  motor  car  was  almost  upon  him;  avoidable,  with  any 
sort  of  care  on  the  part  of  its  driver,  up  to  almost  the  last  moment. 

Under  these  circumstances,  it  is  impossible  for  me  to  find 
that  the  man  was  “riding  in  or  upon”  the  street  car  when  he  was 
injured;  if  he  had  been  in  or  upon  the  street  car,  he  would  not 
have  been  injured  as  he  was.  The  case  would  have  been  different 
if  he  had,  after  alighting,  boarded  the  car  again  with  the  intention 
of  resuming  his  journey,  or  of  beginning  a new  one;  but  nothing 
like  that  was  the  case.  Their  plain  meaning  ought  to  be  given 
to  plain  words,  even  though  the  result  be  different  from  that 
which  one  would  prefer.  And  such  is  the  effect  of  the  cases  in 
the  Courts  of  the  State  of  New  Jersey,  which,  though  very  much 
in  point,  were  not  referred  to  at  the  trial. 

The  case,  therefore,  is  not  one  for  “double  indemnity”  under 


C.  A. 
1912 

Wallace 

v. 

Employers  ’ 
Liability 
Assurance 
Corpora- 
tion 

Meredith,  J.A. 


16 

ONTARIO  LAW  REPORTS.  [vol. 

C.  A. 
1912 

the  policy  in  question,  but  for  single  indemnity;  and  the  amount 
of  the  judgment  entered  for  the  plaintiff  ought  to  be  reduced 

Wallace 

V. 

Employers  ’ 
Liability 
Assurance 
Corpora- 
tion 

accordingly. 

The  appeal  upon  the  other  ground  fails  entirely;  there  is 
ample  evidence  to  support  the  finding  that  the  plaintiff’s  injury 
caused  him  “ temporary  total  disability,”  within  the  meaning  of 
those  words  contained  in  the  policy. 

Meredith,  J.A. 

Moss,  C.J.O.,  Garrow  and  Magee,  JJ.A.,  concurred. 

Appeal  allowed  in  part. 

[IN  THE  COURT  OF  APPEAL.] 

C.A. 

1912 

Rex  v.  Sovereen. 

March  6 

Criminal  Law — Keeping  Disorderly  House — Indictment  at  Sessions — Con- 
viction — Evidence  to  Sustain — Judge's  Charge — Reference  to  Convic- 
tion of  Previous  Occupant — Right  of  Prisoner,  after  Indictment 
Found,  to  Elect  Trial  without  Jury — Criminal  Code,  secs.  2:25,  228, 
825,  873 — Re-election — Notice  to  Sheriff. 

The  defendant  was  indicted  at  the  Sessions  for  keeping  a disorderly  house, 
that  is  to  say,  a common  bawdy  house,  contrary  to  secs.  .228  and  225 
of  the  Criminal  Code,  and  was  tried  by  a jury  and  found  guilty.  Upon 
a case  reserved  by  the  Chairman  of  the  Sessions: — 

Held,  that  there  was  valid  evidence  that  the  defendant  was  the  keeper  of 
a disorderly  house;  and  that  a reference,  in  the  Chairman’s  charge  to 
the  jury,  to  a woman  who  had  been  previously  convicted,  was  not 
erroneous. 

2.  The  defendant  had  been  committed  for  trial  by  a magistrate,  but  the 
indictment  on  which  he  was  convicted  was  not  preferred  by  the  person 
(if  any)  bound  over  to  prosecute,  but  by  the  County  Crown  Attorney, 
with  the  written  consent  of  the  trial  Judge,  under  sec.  873  of  the  Code. 
After  a true  bill  had  been  found  by  the  grand  jury,  and  before  arraign- 
ment or  plea,  the  defendant  asked  to  be  allowed  to  elect  to  be  tried 
by  the  County  Court  Judge  without  a jury  under  the  Speedy  Trials 
sections  of  the  Code:  — 

Held,  that  he  was  not  entitled  so  to  elect. 

Per  Moss,  C.J.O.: — Where  a person  committed  for  trial,  and  whether  in 
custody  or  upon  bail,  has  not,  before  a bill  of  indictment  has  been 
found  against  him  by  a grand  jury,  taken  the  steps  necessary  to  enable 
him  to  elect  to  be  tried  by  a Judge  without  a jury,  he  is  not,  upon  bill 
found  and  arraignment  thereon,  entitled  as  of  right  to  ask  to  be  allowed 
to  elect  to  be  tried  without  a jury.  The  right  is  given  only  in  cases  in 
which  the  exercise  of  such  an  election  would  or  might  effect  a speedy 
trial  of  an  accused  person,  and  thereby  save  the  delay  which  waiting  for 
a trial  by  jury  might  involve. 

XXVI.] 


ONTARIO  LAW  REPORTS. 


17 


Per  Maclaren,  J.A. : — It  must  be  assumed  that  the  charge  in  the  indict- 
ment was  not  the  same  as  that  upon  which  the  defendant  was  committed, 
or  as  any  other  charge  appearing  in  the  evidence  before  the  magis- 
trate, as,  in  either  of  these  events,  the  County  Crown  Attorney  would 
not,  under  sec.  871,  have  needed  the  consent  of  the  Judge  to  prefer  the 
indictment;  and  it  is  clear  from  sec.  825  et  seq.  of  the  Code  that  a 
speedy  trial  before  a Judge  can  be  had  only  upon  a charge  on  which 
the  magistrate  has  committed  the  accused,  or  upon  one  which  appears  in 
the  evidence  before  him.  But,  even  if  the  indictment  had  been  based 
upon  a charge  for  which  the  accused  had  been  committed  or  which  ap- 
peared in  the  depositions,  he  should  have  elected  before  the  true  bill 
was  found  by  the  grand  jury. 

The  King  v.  Komiensky  (1903),  6 Can.  Crim.  Cas.  524,  and  The  King 
v.  Wener  (1903),  76.  406,  approved. 

Per  Magee,  J.A. : — Rex  v.  Thompson  (1908),  17  Man.  L.R.  508,  approved. 
Per  Maclaren  and  Magee,  JJ.A. : — The  defendant,  not  having  given 
to  the  Sheriff  the  notice  required  by  sub-sec.  6 of  sec.  825  of  the  Code 
(as  added  by  8 & 9 Edw.  VII.  ch.  9),  was  not  in  a position  to  claim 
the  right  to  re-elect. 

Case  stated  by  the  Chairman  of  the  General  Sessions  of  the 
Peace  for  the  County  of  Norfolk. 

The  accused,  Wilbert  Sovereen,  was  indicted  at  the  Sessions 
in  December,  1911,  for  that  he  on  the  23rd  July,  1911,  and  on 
other  days  and  times  before  that  date,  did  keep  a disorderly  house, 
that  is  to  say,  a common  bawdy  house,  contrary  to  secs.  228  and 
225  of  the  Criminal  Code,  and  was  found  guilty  by  the  jury. 

The  indictment  was  not  preferred  at  the  instance  of  the  person 
bound  over  to  prosecute,  but  by  the  County*  Crown  Attorney, 
with  the  written  consent  of  the  Chairman,  under  sec.  873  of  the 
Criminal  Code.  After  a true  bill  had  been  found  by  the  grand 
jury,  but  before  arraignment  or  plea,  the  prisoner  desired  to  be 
allowed  to  elect  to  be  tried  before  the  County  Court  Judge  without 
a jury,  under  the  Speedy  Trials  sections  of  the  Code.  On  its  being 
held  that  he  was  not  entitled  so  to  elect,  he  pleaded  “not  guilty.” 

The  Chairman,  on  the  application  of  the  prisoner’s  counsel, 
reserved  for  the  Court  the  following  questions: — 

1.  Was  there  any  valid  evidence  that  the  prisoner  was  the 
keeper  of  a disorderly  house? 

2.  Was  my  charge  erroneous  as  regards  the  reference  made 
therein  to  the  woman  who  had  been  previously  convicted  ? 

3.  Was  the  prisoner,  in  the  circumstances  above  stated,  en- 
titled to  make  an  election  for  speedy  trial  ? 

February  20.  The  case  was  heard  by  Moss,  C.J.O.,  Garrow, 
Maclaren,  and  Magee,  JJ.A.,  and  Latchford,  J. 

2 — XXVI.  O.L.R. 


C.  A. 
1912 

Rex 

v. 

Sovereen 


18 


ONTARIO  LAW  REPORTS. 


0.  A. 
1912 

Rex 

v. 

SOVEREEN 


[vol. 


J.  B.  Mackenzie,  for  the  prisoner,  argued  that  the  evidence 
as  to  the  character  of  the  house  under  the  previous  occupant  was 
inadmissible;  and  that,  as  the  law  now  stands,  a person  out  on 
bail  is  entitled  to  elect  to  be  tried  by  a Judge  without  a jury: 
Criminal  Code,  sec.  825,  sub-secs.  6 and  7,  added  by  8 & 9 Edw. 
VII.  ch.  9.*  There  is  no  reported  case  since  the  amendment 
of  the  Code  by  the  statute  of  8 & 9 Edw.  VII.  Reference 
was  made  to  the  following  cases:  Rex  v.  O’Gorman  (1909),  18 
O.L.R.  427;  The  Queen  v.  Laurence  (1896),  1 Can.  Crim.  Cas.  295; 
The  King  v.  Komiensky  (1903),  6 Can.  Crim.  Cas.  524;  The  King 
v.  Wener  (1903),  6 Can.  Crim.  Cas.  406;  Regina  v.  St.  Clair  (1900), 
27  A.R.  308;  Regina  v.  McNamara  (1891),  20  O.R.  489. 

J.  R.  Cartwright,  K.C.,  for  the  Crown,  argued  that  the  evidence 
was  sufficient  to  support  the  conviction,  and  that  the  prisoner 
was  not  entitled  to  elect  to  be  tried  without  a jury  after  a bill  of 
indictment  had  been  found  against  him. 

March  6.  Moss,  C.J.O. : — We  are  all  agreed  that  the  questions 
submitted  by  the  learned  Chairman  of  the  General  Sessions  should 
be  answered  adversely  to  the  contentions  made  on  behalf  of  the 
prisoner. 

As  to  the  first  and  second  questions,  having  regard  to  the 
evidence  and  the  charge  to  the  jury,  which  are  made  part  of  the 
stated  case,  there  can  be  no  reasonable  doubt. 

The  third  question  affords  more  room  for  difference  of  opinion — 
not,  however,  as  to  what  the  proper  conclusion  should  be,  hut 
rather  as  to  grounds  upon  which  it  should  be  based. 

Speaking  for  myself,  and  with  the  utmost  respect  for  those 
who  have  indicated  or  expressed  a different  view,  I think  that 
where,  as  here,  a person  committed  for  trial,  and  whether  in  custody 
or  upon  bail,  has  not,  before  a bill  of  indictment  has  been  found 
against  him  by  a grand  jury,  taken  the  steps  necessary  to  enable 

*6.  A person  accused  of  any  offence  within  sub-section  1 of  this  sec- 
tion, who  has  been  bound  over  by  a Justice  or  Justices  under  the  provisions 
of  section  696  and  is  at  large  under  bail,  may  notify  the  Sheriff  that  he 
desires  to  make  his  election  under  this  Part,  and  thereupon  the  Sheriff 
shall  notify  the  Judge,  or  the  prosecuting  officer,  as  provided  in  section 
826. 

7.  In  such  case,  the  Judge  having  fixed  the  time  when  and  the  place 
where  the  accused  shall  make  his  election,  the  Sheriff  shall  notify  the 
accused  thereof,  and  the  accused  shall  attend  at  the  time  and  place  so 
fixed,  and  the  subsequent  proceedings  shall  be  the  same  as  in  other  cases 
under  this  Part. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


19 


him  to  elect  to  be  tried  by  a Judge  without  a jury,  he  is  not,  upon 
bill  found  and  arraignment  thereon,  entitled  as  of  right  to  ask  to  be 
allowed  to  elect  to  be  tried  without  a jury.  If  that  is  not  the  effect 
of  the  legislation,  it  places  it  in  the  power  of  the  accused  not  merely 
to  postpone  his  trial,  but  to  render  futile  all  that  has  been  done 
by  the  grand  jury,  and  necessitate  a compliance  with  all  the  forms 
prescribed  by  sec.  827  of  the  Code,  including  the  preparation  and 
preferring  by  the  prosecuting  officer  of  a charge  in  accordance 
with  the  directions  given  in  sec.  827  (3). 

I am  unable  to  think  that  it  was  the  intention  to  give  an  accused 
person  the  general  right  to  elect  to  be  tried  without  a jury.  On 
the  contrary,  I think  that  the  intention  was  to  give  it  only  in  cases 
in  which  the  exercise  of  such  an  election  would  or  might  effect  a 
speedy  trial  of  an  accused  person,  and  thereby  save  the  delay 
which  waiting  for  a trial  by  jury  might  involve. 

And  I do  not  think  the  legislation  extends  the  right  beyond 
that  point. 

I agree  that  the  first  question  should  be  answered  in  the 
affirmative  and  the  second  and  third  in  the  negative,  and  that  the 
conviction  should  stand. 

Maclaren,  J.A. : — The  accused  in  this  case  was  tried  at  the 
General  Sessions  of  the  County  of  Norfolk  before  Robb,  County 
Court  Judge,  and  a jury,  and  was  convicted  of  keeping  a disorderly 
house.  He  had  been  committed  for  trial  by  a magistrate,  but  the 
indictment  on  which  he  was  convicted  was  not  preferred  by  the 
person  bound  over  to  prosecute,  but  by  the  County  Crown  At- 
torney, with  the  written  consent  of  the  trial  Judge,  under  sec.  873 
of  the  Criminal  Code.  After  a true  bill  had  been  found  by  the 
grand  jury,  and  before  arraignment  or  plea,  the  prisoner  desired 
to  elect  to  be  tried  before  the  County  Court  Judge  without  a 
jury,  under  the  Speedy  Trials  Act  (Part  XVIII.  of  the  Criminal 
Code).  On  its  being  held  that  he  was  not  entitled  so  to  elect, 
he  pleaded  “not  guilty.”  At  the  close  of  the  trial,  the  Judge, 
on  the  application  of  the  prisoner’s  counsel,  reserved  for  this 
Court  the  following  questions: — 

1.  Was  there  any  valid  evidence  that  the  prisoner  was  the 
keeper  of  a disorderly  house  ? 

2.  Was  my  charge  erroneous  as  regards  the  reference  made 
therein  to  the  woman  who  had  been  previously  convicted  ? 


C.  A. 
1912 

Rex 

v. 

SOVEREEN 
Moss,  C.J.O. 


ONTARIO  LAW  REPORTS.  [vol. 

3.  Was  the  prisoner,  in  the  circumstances  above  stated, 
entitled  to  make  an  election  for  speedy  trial  ? 

As  to  the  first  question,  I am  of  opinion  that  there  was  ample 
evidence,  if  believed  by  the  jury,  to  prove  that  the  house  in  question 
was  a disorderly  house,  and  that  he  was  the  keeper.  The  house 
belonged  to  him  and  also  the  furniture,  and  he  used  it  when  working 
the  farm  with  which  it  was  connected,  which  was  some  two  or 
three  miles  from  his  homestead.  The  evidence  points  strongly 
to  his  having  been  a joint  occupant  or  keeper  with  the  woman  said 
to  have  been  convicted  in  October,  1910,  and  to  his  being  the  sole 
keeper  after  that  tiiiie,  the  house  being  occupied  from  time  to 
time  by  disreputable  women.  The  house  retained  the  same 
character  and  reputation  after  October,  1910,  as  before;  and  the 
admissions  made  by  the  witness  who  did  the  chores  about  the 
house  for  the  prisoner — and  made  very  reluctantly — are  quite 
sufficient  alone  to  justify  the  conviction.  This  question  should 
be  answered  in  the  affirmative. 

As  to  the  second  question,  what  the  trial  Judge  said  in  his 
charge  on  the  subject  was  this:  “It  has  been  suggested  that  the 
woman  who  has  been  already  convicted  was  the  keeper;  but  I 
think  that  we  have  nothing  to  do  with  that  in  this  case.  I think 
that,  no  matter  whether  she  was  convicted  or  not,  you  have  got 
to  try  this  case  upon  the  evidence  that  has  been  presented  before 
you;  and,  if  you  come  to  the  conclusion  that  the  prisoner  is  the 
keeper  or  was  at  any  time  the  keeper  of  this  house,  you  should 
find  him  guilty,  giving  him,  of  course,  the  benefit  of  any  doubt 
that  you  may  have.”  I fail  to  see  on  what  grounds  the  prisoner 
could  properly  complain  of  this  charge.  This  question  should, 
in  my  opinion,  be  answered  in  the  negative. 

The  third  question  should  also,  in  my  opinion,  be  answered 
in  the  negative.  Part  XVIII.  of  the  Criminal  Code  (secs.  822  to 
842  inclusive),  relating  to  “Speedy  Trials  of  Indictable  Offences,” 
has  reference  exclusively  to  prosecutions  based  upon  an  informa- 
tion or  complaint  and  a preliminary  examination  before  a magis- 
trate. It  is  true  that  there  was  in  this  case  a preliminary  examina- 
tion before  a magistrate,  and  the  prisoner  was  committed  for 
trial.  But  this  was  not  followed  up  by  an  indictment  based 
upon  the  charge  for  which  he  was  committed,  “or  for  any  charge 
founded  upon  the  facts  or  evidence  disclosed  on  the  depositions 


XXVI.] 


ONTARIO  LAW  REPORTS. 


21 


f taken  before  the  Justice/’  as  might  have  been  done  under  the 
provisions  of  sec.  871  of  the  Criminal  Code.  It  does  not  appear 
from  the  reserved  case  whether  or  not  the  complainant  before  the 
magistrate  was  present  at  the  Sessions;  but,  whether  or  not,  the 
County  Crown  Attorney  might  prefer  an  indictment  for  the 
charge  upon  which  the  prisoner  was  committed  or  for  any  charge 
founded  on  the  facts  or  evidence  disclosed  in  the  depositions: 
Criminal  Code,  sec.  872.  The  Deputy  Attorney-General  informed 
us  at  the  argument  that  his  instructions  were,  that  no  one  was 
bound  over  to  prosecute,  although  the  reserved  case  would  lead 
one  to  infer  that  some  one  had  been  so  bound;  but,  in  my  opinion, 
in  the  circumstances  of  this  case,  this  was  quite  immaterial. 

The  fact  is,  that  the  depositions  and  the  committal  were 
both  ignored,  and  were  not  followed  by  the  person  bound  over  to 
prosecute,  if  there  was  such  a person,  or  by  the  County  Crown 
Attorney.  Instead  of  this,  the  County  Crown  Attorney,  under 
sec.  873,  obtained  the  written  consent  of  the  Judge  to  prefer  the 
indictment  set  out  in  the  reserved  case,  on  which  a true  bill  was 
returned  by  the  grand  jury,  and  on  which  the  petty  jury  returned 
a verdict  of  “ guilty.”  The  depositions  taken  before  the  magis- 
trate were  not  made  a part  of  the  reserved  case,  and  counsel  for 
the  prisoner  did  not,  before  us,  ask  or  even  suggest  that  they 
should  be  made  a part  of  it.  In  the  circumstances,  we  must, 
I think,  assume  that  the  charge  in  the  indictment  is  not  the  same 
as  that  for  which  the  prisoner  was  committed,  or  any  other  charge 
appearing  in  the  evidence  before  the  magistrate,  as,  in  either  of 
these  events,  the  County  Crown  Attorney  would  not,  under  sec. 
871,  have  needed  the  consent  of  the  Judge  to  prefer  the  indictment. 

It  is  quite  clear  from  sec.  825  and  the  succeeding  sections  of 
the  Code  that  a speedy  trial  before  a Judge  can  be  had  only  upon 
a charge  on  which  the  magistrate  has  committed  the  accused, 
or  upon  one  which  appears  in  the  evidence  before  him.  As  said 
by  Wurtele,  J.,  in  The  King  v.  Wener,  6 Can.  Crim.  Cas.  406,  at 
p.  413:  “The  Criminal  Code  does  not  prescribe  that  an  accused 
can  elect  to  be  tried  without  a jury  when,  without  a preliminary 
inquiry  or  without  a committal  or  an  admission  to  bail,  and 
subsequent  custody  for  trial,  a bill  of  indictment  has  been  preferred 
by  the  Attorney-General  or  by  any  one  by  his  direction,  or  with 
the  written  consent  of  a Judge  of  a Court  of  criminal  jurisdiction, 


C.  A. 
1912 

Rex 

v. 

SOVEREEN 
Maclaren,  J.A. 


22 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Rex 

v. 

SOVEREEN 
Maclaren,  J.A. 


[VOL. 


or  by  order  of  such  Court,  and  thus  remove  the  prosecution  from 
the  forum  to  which  it  properly  belongs  to  another  to  which  juris- 
diction has  not  in  such  case  been  given  by  law.  In  the  absence 
of  any  statutory  provisions  or  statutory  authority  an  accused 
has  no  right  in  such  a case  to  demand  and  obtain  a trial  in  any 
other  Court  than  the  one  in  which  the  indictment  was  found, 
and  which  has  jurisdiction  over  the  case,  and  is  seized  with  it.” 

As  stated  above,  the  indictment  in  this  case  did  not  originate 
with  and  is  not  based  upon  a charge  or  depositions  taken  before 
a magistrate,  but  is  based  solely  upon  the  written  consent  given 
by  the  trial  Judge,  and  the  Code  does  not  provide  for  a trial  before 
a Judge  without  a jury  in  such  a case. 

. But,  even  if  the  indictment  had  been  based  upon  a charge 
for  which  the  accused  had  been  committed  or  which  appeared  in 
the  depositions,  I am  of  opinion  that  he  should  have  elected  before 
the  true  bill  was  found  by  the  grand  jury.  I agree  with  what  is 
said  by  Wurtele,  J.,  in  the  Wener  case,  at  the  page  above  cited. 
He  there  says:  “If  no  election  has  been  made  before  an  indict- 
ment is  returned  founded  on  the  facts  or  evidence  disclosed  by  the 
depositions  taken  at  the  preliminary  inquiry,  the  accused  has  no 
statutory  right  to  demand  a trial  before  a Judge  of  Sessions 
without  a jury,  and  avoid  a trial  on  the  indictment.”  In  another 
case  of  The  King  v.  Komiensky , in  the  same  volume,  at  p.  528, 
the  same  Judge  says:  “On  the  finding  of  true  bills,  the  Court  is 
finally  seized  with  the  prosecution,  and  exclusive  jurisdiction 
over  them  is  vested  in  the  Court,  which  is  the  only  competent 
forum  or  tribunal  to  carry  them  in  due  course  and  in  the  ordinary 
way  to  their  final  stage  of  either  conviction  or  acquittal  by  the 
petty  jury.”  On  the  other  hand,  in  a Manitoba  case,  Rex  v. 
Thompson  (1908),  17  Man.  L.R.  608,  it  was  held  by  Howell,  C.J.A., 
that  a prisoner  may  elect  up  to  the  time  of  pleading.  I can  find 
nothing  in  the  Code  to  justify  this  position,  and,  in  my  opinion, 
it  is  quite  contrary  to  the  genius  and  spirit  of  the  Speedy  Trials 
Act  (now  Part  XVIII.  of  the  Code).  I am  of  opinion  that  the  cor- 
rect doctrine  is  that  laid  down  as  above  by  Wurtele,  J.  To  hold 
otherwise  would  be  to  defeat  the  very  object  and  purpose  of  the 
legislation,  and  the  title  of  “Speedy  Trials”  would  become  a 
veritable  misnomer,  and  provisions  that  were  designed  and  en- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


23 


acted  to  speed  trials  would  be  converted  into  machinery  to  retard 
and  delay. 

But  there  is  also,  in  addition,  another  difficulty  in  the  way  of 
the  prisoner.  Having  been  bound  over  under  sec.  696,  and  being 
under  bail,  if  he  desired  to  elect,  he  should  have  given  the  notice 
of  such  desire  to  the  Sheriff,  as  required  by  sub-sec.  6,  added  to 
sec.  825  of  the  Code  by  the  amending  Act  of  1909,  8 & 9 Edw.  VII. 
ch.  9.  This  he  did  not  do,  so  that  he  did  not  take  the  first  step 
to  secure  such  right.  It  may  be  said  that  this  objection  is  a 
technical  one.  But,  if  the  prisoner  is  claiming  a privilege  so  much 
at  variance  with  the  spirit  and  object  of  the  legislation,  he  should 
at  least  shew  some  compliance  with  the  plain  provisions  laid  down 
in  the  legislation. 


C.  A. 
1912 

Rex 

v. 

SOVEREEN 
Maclaren,,  J.A. 


For  these  reasons,  and  especially  on  the  ground  first  set  forth, 
which,  in  my  judgment,  is  quite  sufficient,  I am  of  opinion  that  the 
third  question  should  be  answered  in  the  negative. 


Magee,  J. A.:- — Reserved  case  stated  by  the  Chairman  of  the 
General  Sessions  of  the  Peace  for  the  County  of  Norfolk. 

The  accused,  Wilbert  Sovereen,  was  indicted  before  that 
Court  in  December,  1911,  for  that  he,  on  the  23rd  day  of  July, 
1911,  and  on  other  days  and  times  before  that  date,  did  keep  a 
disorderly  house,  that  is  to  say,  a common  bawdy  house,  contrary 
to  secs,  228  and  225  of  the  Criminal  Code.  The  jury  found  him 
“ guilty.” 

Under  sec.  228,  this  is  an  indictable  offence.  There  is  no 
limitation  of  time  for  the  commencement  of  a prosecution  for  it. 
Consequently,  it  was  open  to  adduce  evidence  such  as  was  given, 
going  as  far  back  as  May,  1910.  It  was  objected  that  such  evi- 
dence was  inadmissible,  because,  under  sec.  1142,  in  the  case  of  an 
offence  punishable  upon  summary  conviction,  the  complaint  must 
be  made  or  information  laid  within  six  months,  and  under  sec.  774 
(amended  by  8 & 9 Edw.  VII,  ch.  9)  a “magistrate,”  as  defined 
in  sec.  771,  could,  without  the  assent  of  the  accused,  summarily 
try  a person  charged  with  keeping  a disorderly  house.  But  Part 
XVI.,  which  includes  sec. > 774,  relates  to  indictable  offences,  and 
not  to  offences  punishable  under  summary  convictions,  which 
are  dealt  with  by  Part  XV.  The  only  provisions  of  the  Code 
under  which  the  keeper  of  a disorderly  house  or  bawdy  house  can 


24 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Rex 

v. 

SOYEREEN 

Maeee.  J.A. 


be  punished  by  summary  conviction  are  secs.  238  and  239,  the 
former  of  which  declares  every  one  who  is  the  keeper  of  such  a 
house  to  be  “a  loose,  idle  or  disorderly  person  or  vagrant ;”  and 
sec.  239  makes  “a  loose,  idle  or  disorderly  person  or  vagrant” 
liable  to  fine  or  imprisonment  or  both.  But  that  punishment 
is  not  for  keeping  the  house,  it  is  for  being  “a  loose,  idle  or  dis- 
orderly person  or  vagrant.”  In  The  Queen  v.  Stafford  (1898), 

1 Can.  Grim.  Cas.  239,  although  the  charge  was  for  being  “the 
keeper  of  a common  bawdy  house,”  it  is  evident  that  the  proceed- 
ings must  have  been  taken  under  the  sections  then  corresponding 
to  secs.  238  and  239,  and  the  imprisonment  was  held  to  be  un- 
authorised by  them.  As  the  offence  here  charged  is  punishable 
only  by  indictment,  sec.  1142  does  not  apply. 

It  was  shewn  that  the  defendant  was  the  owner  of  the  house 
in  question,  which  was  situate  on  a parcel  of  45  acres  of  land 
owned  by  him.  He  resided  about  two  and  a half  miles  away. 
The  house  was  “formerly  occupied”  by  one  Mrs.  Denby.  There 
is  some  reference  to  the  fact  of  her  having  been  arrested  and 
convicted,  but  for  what  does  not  appear.  Presumably  it  was  for 
keeping  this  disorderly  house.  She  left  in  October,  1910.  During 
her  occupancy,  there  is  evidence  of  other  women  being  there  at 
various  times,  and  men,  and  of  the  evil  reputation  of  the  house, 
and  of  instances  of  prostitution  by  inmates,  and  of  lewd  conduct 
by  this  defendant  with  Mrs.  Denby  and  another  woman,  and  of  his 
having  been  “hundreds  of  times”  in  the  bed-room  with  the 
former,  and  of  his  having  invited  there  one  witness  who  was  there 
several  times,  and  says  the  house  was  one  of  ill-fame,  and  that 
this  defendant  and  Mrs.  Denby  were  the  keepers — the  people 
who  were  running  the  house.  As  to  this,  the  witness  was  hardly 
cross-examined.  This  was  clearly  “some  valid  evidence”  to 
shew  that  the  defendant  was  a keeper  of  a common  bawdy  house, 
under  sec.  228. 

Since  October,  1910,  the  house,  though  furnished  by  the  de- 
fendant, has  been  vacant,  unless  when  he  occasionally  stopped 
there.  The  presence  of  one  or  two  women  there  on  three  oc- 
casions, weeks  apart,  is  shewn,  but  not  the  time  of  day,  except 
once  at  night,  nor  the  length  of  their  stay.  Both  of  them  had 
been  there  in  Mrs.  Denby’s  time.  There  is  no  evidence  of  any 
improper  conduct  or  of  other  men  being  there.  There  is  not, 


XXVI.] 


ONTARIO  LAW  REPORTS. 


25 


I think,  sufficient  proof  of  the  existence  of  a common  bawdy 
house  there  during  this  period. 

In  his  charge  to  the  jury,  the  learned  Chairman,  after  pointing 
out  that  the  defendant  was  the  owner  of  the  house,  said:  “It 
had  been  suggested,  however,  that  the  woman  who  had  already 
been  convicted  was  the  keeper;  but  I think  that  we  have  nothing 
to  do  with  that  in  this  case.  I think  that,  no  matter  whether  she 
was  convicted  or  not,  you  have  got  to  try  this  case  upon  the 
evidence  that  has  been  presented  before  you.”  I am  at  a loss  to 
discover  any  objection  to  this,  or  indeed  why  the  learned  Chairman 
was  indulgent  enough  to  reserve  any  question  upon  it. 

Another  question  remains  as  to  the  right  of  the  Court  to  try 
the  defendant.  The  statement  of  the  case  sets  out  these  facts: 
“The  prisoner  had  been  committed  for  trial  after  the  preliminary 
hearing,  and  admitted  to  bail,  and  appeared,  as  provided  by  his 
recognizances,  for  trial  at  the  above-named  General  Sessions  of 
the  Peace.  The  bill  of  indictment  was,  however,  not  preferred 
by  the  person  bound  over  to  prosecute,  but  was  preferred  under 
directions  given  by  the  trial  Judge,  as  provided  by  sec.  873  of  the 
Criminal  Code.  Before  arraignment  or  plea,  the  prisoner  desired 
to  elect  trial  by  the  County  Court  Judge,  but  it  was  held  that  he 
was  not  entitled,  under  the  circumstances,  so  to  elect.”  I 
assume  that  the  information  laid,  the  preliminary  hearing 
had,  and  the  defendant’s  recognizance  to  appear  for  trial,  were  all 
upon  the  same  charge  as  the  indictment. 

It  is  only  under  sub-secs.  6 and  7 of  sec.  825  of  the  Criminal 
Code,  1906,  as  added  in  1909  by  8 & 9 Edw.  VII.  ch.  9,  that  the 
defendant,  being  not  in  custody  but  under  bail,  could  have 
claimed  any  right  to  a trial  before  a Judge  without  a jury. 
Previously,  he  would  have  had  to  be  in  actual  custody  either  upon 
the  original  commitment  for  trial  by  the  magistrate  holding  the 
preliminary  inquiry,  or  by  virtue  of  a surrender  into  custody 
after  bail,  or  “otherwise  in  custody  awaiting  trial  on  the  charge.” 

The  new  sub-section  (6)  provides  that  a person  accused 
who  has  been  bound  over  by  a Justice  under  sec.  696  (i.e.,  to  appear 
for  trial),  and  is  at  large  under  bail,  may  notify  the  Sheriff  that  he 
desires  to  make  his  election  under  Part  XVIII.  (relating  to  Speedy 
Trials),  and  thereupon  the  Sheriff  shall  notify  the  Judge;  and, 
by  sub-sec.  7,  the  Judge  having  fixed  the  time  and  place  for  the 


C.  A. 
1912 

Rex 

v. 

SOVEREEN 
Magee,  J.A. 


26 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Rex 

v. 

SoVEREEN 
Magee,  J.A. 


accused  to  make  his  election,  the  Sheriff  shall  notify  the  accused 
thereof,  and  the  accused  shall  attend,  and  the  subsequent  proceed- 
ings shall  be  as  in  other  cases  under  Part  XVIII.;  and,  by  sub-sec. 
8,  the  recognizance  taken  when  the  accused  was  bound  over  shall 
be  obligatory  with  reference  to  his  appearance  at  the  time  and 
place  so  fixed,  and  to  the  trial  and  proceedings  thereupon,  as  if 
originally  entered  into  with  reference  thereto. 

No  time  is  specified  for  the  giving  of  the  notice  to  the  Sheriff. 
If  a notice  were  given  in  such  a case,  it  would  be  material  to 
consider  at  what  time  an  election  may  be  made  by  those  in  custody. 
The  original  Act  providing  for  trials  by  a Judge  without  a jury, 
32  & 33  Viet.  (1869)  ch.  35,  was  intituled  “An  Act  for  the  more 
speedy  trial  in  certain  cases  of  persons  charged,”  etc. — after- 
wards called  the  Speedy  Trials  Act — and  this  might  give  some 
colour  to  the  idea  that  where  the  trial  would  not  be  speeded  the 
Act  was  not  intended  to  apply.  But,  excepting  in  the  title,  there 
was  nothing  in  the  wording  of  the  Act  itself  so  to  indicate,  except 
possibly  the  provisions  that  the  prisoner  might  with  his  own 
consent  be  tried  “out  of  Sessions,”  and  that  the  Judge  was  to 
tell  him  that  he  had  the  option  to  “remain  untried  until  the  next 
sittings”  of  the  Court  of  General  Sessions  of  Oyer  and  Terminer. 
These  words  did  not,  in  fact,  I think,  imply  that  the  speedy  trial 
must  be  before  the  session  of  the  jury  Court  began — but  subset 
quent  amendments  removed  any  possibility  of  such  a construction. 
It  must,  I think,  be  taken  that  the  object  of  speedy  trials  indicated 
by  the  title  was  to  be  attained  by  the  creation  of  a new  tribunal — 
a Court  of  record— which  would  not  be  limited  to  half-yearly  or 
other  periodical  sittings,  but  could  sit  at  any  time,  and  that 
tribunal  being  created  (see  Ontario  statute  of  1873,  36  Viet, 
ch.  8,  secs.  357,  358),  the  positive  directions  to  the  Sheriff  and  the 
Judge  as  to  their  duties  towards  prisoners,  in  effect,  gave  each 
prisoner  to  whom  the  Act  applied  an  option  and  right  of  election 
as  to  which  one  of  the  tribunals  he  would  be  tried  by,  or  rather 
the  right  to  have  an  opportunity  to  say  he  chose  trial  by  the 
Judge.  I do  not  think  it  would  have  been  any  answer  to  a claim 
to  exercise  such  right  to  say  to  the  prisoner,  “The  jury  Court  is 
now  sitting,  and  your  trial  there  can  take  place  to-day,  or  sooner 
than  if  you  are  to  be  tried  by  the  Judge  alone.”  It  is  now  expressly 
declared  in  sec.  825  that  the  trial  by  the  Judge  shall  be  had  whether 


XXVI.]  ONTARIO  LAW  REPORTS. 


27 


the  jury  Court  or  the  grand  jury  thereof  is  or  is  not  then  in  session — - 
and  I agree  with  the  opinion  of  Howell,  C.J.A.,  in  Rex  v.  Thomp- 
son, 17  Man.  L.R.  608,  that  this  provision  is  not  restricted  to  the 
trial  itself. 

Then,  by  sec.  828,  even  after  a prisoner  has  elected  to 
be  tried  by  a jury,  he  may  notify  the  Sheriff  that  he  desires 
to  re-elect,  and  this  at  any  time  before  his  trial  has  commenced, 
and  whether  an  indictment  has  been  preferred  against  him  or 
not — unless  the  Judge  is  of  opinion  that  it  would  not  be  in  the 
interest  of  justice  to  allow  a second  election;  and,  if  an  indictment 
has  been  actually  preferred,  the  consent  of  the  prosecuting  officer 
must  be  obtained. 

In  cases  where,  under  Part  XYI.  or  XVII.,  the  prisoner  had 
elected  before  the  committing  magistrate  not  to  be  tried  by  him, 
but  by  a jury,  he  may,  under  sec.  830,  notify  the  Sheriff,  before 
the  sitting  of  the  jury  Court,  that  he  desires  to  re-elect. 

The  Code,  therefore,  gives  three  periods  for  the  election  by  an 
actual  prisoner  as  of  right — before  the  sitting,  before  the  prefer- 
ment of  the  bill,  and  before  the  trial  has  commenced.  It  would  be 
difficult  to  say  which  of  these  should  apply  to  the  case  of  an 
accused  person  who  is  at  large  under  bail;  but  I think  it  is  clear 
that  his  notification  to  the  Sheriff  must  be  taken  as  the  foundation 
of  his  right  to  put  himself  in  the  position  of  a prisoner  as  one 
entitled  to  be  called  upon  to  elect.  That  he  was  not  in  actual 
custody  merely  by  reason  of  appearing,  “as  provided  by  his 
recognizance,”  is  manifest  from  sec.  1092,  which  declares  that  a 
recognizance  is  not  discharged  by  arraignment  or  conviction. 

This  defendant  did  not  give  any  such  notice,  so  far  as  appears; 
but,  at  the  last  moment,  when  called  upon  to  answer  to  the  in- 
dictment, said  that  he  desired  to  elect.  Without  being  in  custody 
and  without  having  given  the  notice  to  the  Sheriff,  he  had  not 
put  himself  in  th@  position  to  claim  that  right.  It  appears  that 
the  Chairman  of  the  Court  of  General  Sessions  held  “that  he  was 
not  entitled  under  the  circumstances”  so  to  elect.  Therein  the 
Chairman  was  right,  as  no  notification  had  been  given. 

The  defendant  then  pleaded  to  the  indictment,  or  a plea  must 
have  been  entered  for  him,  as  the  trial  proceeded,  and  he  was  by 
the  jury  found  “guilty.”  There  is  nothing  to  indicate  that  any 
other  result  might  have  been  arrived  at  if  the  Chairman  had  been 


C.  A. 
1912 

Rex 

v. 

SOVEREEN 
Magee,  J.A. 


28 

ONTARIO  LAW  REPORTS.  [vol. 

C.  A. 
1912 

trying  the  case  without  a jury,  and  there  is  no  reason  to  suppose 
that  there  was  any  failure  of  justice  through  the  defendant’s 

Rex 

V. 

SOYEKEEN 

omission. 

I would  answer  the  first  question  in  the  affirmative,  the  second 

Magee,  J.A. 

and  third  in  the  negative. 

Garrow,  J.A.,  and  Latchford,  J.,  concurred. 

Conviction  affirmed. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


29 


[IN  THE  COURT  OF  APPEAL.] 

Re  Village  of  Brussels  and  McKillop  Municipal 
Telephone  System. 

Re  Village  of  Blyth  and  Township  of  McKillop. 

Ontario  Railway  and  Municipal  Board — Jurisdiction — Separate  Telephone 
Systems  in  Adjacent  Territories — Order  for  Connection  and  Inter- 
communication and  Construction  and  Operation  of  Switch-board  and 
Trunk  Line — Ontario  Telephone  Act,  1910 — Agreement  with  Bell  Tele- 
phone Company  Approved  by  Board — Applications  to  Board — Parties — 
Township  Corporation — “Municipal  Telephone  System ” — Power  of  one 
Member  of  Board  to  Make  Order. 

The  Corporation  of  the  Village  of  Brussels  applied  to  the  Ontario  Railway 
and  Municipal  Board  for  an  order  compelling  “The  McKillop  Municipal 
Telephone  'System”  to  establish  connection,  intercommunication,  joint 
operation,  reciprocal  use,  and  transmission  of  business  between  the  ap- 
plicants’ and  the  respondents’  telephone  systems;  and  the  Board  made 
an  order  accordingly,  and  by  a subsequent  order  refused  to  rescind  it;  from 
which  orders  the  township  corporation,  representing  the  subscribers  to 
the  township  telephone  system,  appealed.  The  first  order  required  the 
appellants  to  build  and  operate  a switch-board  and  a trunk  telephone 
line.  It  appeared  that  the  appellants  were  operating  under  an  agree- 
ment made  between  them  and  the  Bell  Telephone  Company,  substantially 
for  the  purposes  recognised  and  authorised  by  sec.  8 of  the  Ontario 
Telephone  Act,  1910,  which  agreement  had  been  approved  by  the  Board 
prior  to  the  application  made  by  the  village  corporation: — 

Held,  that  the  result  of  obedience  to  the  order  appealed  against  would  be 
to  alter  or  vary  the  relations  based  upon  the  agreement  with  the  Bell 
Telephone  Company  approved  by  the  Board;  and  the  Board  had  no 
jurisdiction  to  do  that,  unless  upon  an  application  for  the  purpose  with 
proper  parties  before  it. 

Held,  also,  that  the  order  made  (involving  a large  expenditure)  was  not, 
even  apart  from  the  agreement  with  the  Bell  Telephone  Company,  auth- 
orised by  any  of  the  provisions  of  the  Act;  Maclaren,  J.A.,  expressing 
no  opinion  as  to  this;  and  Magee,  J.A.,  inclining  to  the  contrary  opinion. 
Per  Moss,  C.J.O.,  and  Meredith,  J.A. : — The  application  should  have  been 
made  against  the  township  corporation,  not  against  the  “system,” 
which  was  not  a legal  entity. 

Per  Meredith,  J.A. : — There  was  no  power  in  one  member  of  the  Board  to 
hear  the  application  and  make  the  order;  and  the  Bell  Telephone  Com- 
pany should  have  been  given  an  opportunity  to  be  heard  upon  the  appli- 
cation. 

Orders  of  the  Board  set  aside  for  want  of  jurisdiction. 

An  order  of  similar  purport  made  by  the  Board  upon  the  application  of  the 
Corporation  of  the  Village  of  Blyth  was  also  set  aside. 

Appeals  in  two  separate  matters  from  orders  of  the  Ontario 
Railway  and  Municipal  Board. 

The  first  appeal  was  by  the  McKillop  Municipal  Telephone 
System  from  two  orders  made  by  the  Board. 

The  first  order  was  made  on  the  10th  March,  1911,  on  the 
application  of  the  Municipal  Corporation  of  the  Village  of  Brussels, 
who  named  as  respondents  “The  McKillop  Municipal  Telephone 
System,”  and  was  as  follows: — 


C.  A. 
1912 

March  6 


30 

C.  A. 
1912 

Re 

Tillage  of 
Brussels 
and 

McKillop 

Municipal 

Telephone 

System. 


ONTARIO  LAW  REPORTS.  [vol. 

Upon  the  application  of  the  said  applicants,  and  upon  hearing 
what  was  alleged  by  counsel  for  the  applicants  and  respondents, 
and  for  the  Bell  Telephone  Company  of  Canada,  and  the  Board 
having  referred  this  application  for  consideration  and  report  to 
its  expert,  upon  consideration  of  the  said  expert’s  report: — 

The  Board,  under  and  in  pursuance  of  sec.  9 of  the  Ontario 
Telephone  Act,  1910,  orders  connection,  intercommunication, 
joint  operation,  reciprocal  use,  and  transmission  of  business  be- 
tween the  applicants’  and  respondents’  telephone  systems  or  lines. 

The  Board  further  orders  and  directs  the  applicants  to  con- 
struct, build,  and  maintain  a trunk  telephone  line  from  their 
switch-board  in  their  central  office  in  the  village  of  Brussels,  to  a 
point  on  the  gravel  road  half-way  between  the  village  of  Brussels 
and  the  town  of  Seaforth. 

The  Board  further  orders  that  the  applicants  shall  bear  all 
the  cost  of  building,  constructing,  and  maintaining  the  said  trunk 
line,  and  of  equipping  and  operating  the  switch-board  in  the 
central  office  in  the  said  village  of  Brussels,  and  shall  allow  the 
use  of  the  same  and  of  all  their  lines  to  the  respondents,  or  any  of 
them,  on  the  basis  of  a charge  of  five  cents  for  each  call  or  con- 
nection. 

And  it  is  further  ordered  that  the  respondents  shall  build, 
install,  maintain,  and  operate  a switch-board  in  or  adjacent  to 
the  town  of  Seaforth,  and  construct,  build,  and  maintain  a trunk 
telephone  line  therefrom  to  the  above-mentioned  point  on  the 
gravel  road,  half-way  between  the  town  of  Seaforth  and  the 
village  of  Brussels,  being  the  point  up  to  which  the  said  applicants 
have  been  hereinbefore  directed  to  construct  their  line  as  afore- 
said. 

And  it  is  further  ordered  that  the  respondents  shall  bear  and 
pay  all  the  cost  of  building,  constructing,  and  maintaining  the 
said  trunk  line,  and  of  equipping  and  operating  the  said  switch- 
board in  a central  office  in  or  adjacent  to  the  said  town  of  Seaforth, 
and  shall  allow  the  use  of  the  same  and  of  all  their  lines  to  the 
applicants,  or  any  of  them,  on  the  basis  of  a charge  of  five  cents 
for  each  call  or  connection. 

And  it  is  further  ordered  that,  should  any  person  who  is  not 
a subscriber  to  either  the  system  of  the  applicants  or  the  re- 
spondents, desire  to  avail  himself  of  the  use  of  the  said  switch- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


31 


board  and  lines,  or  any  of  them,  then  that  a charge  of  twenty 
cents  shall  be  made  and  collected  therefor,  together  with  messenger 
service,  if  any,  which  sum  or  sums  shall  be  paid  in  to  the  office 
from  which  the  call  originated,  and  that  the  said  charge  of  twenty 
cents,  exclusive  of  messenger,  shall  form  a common  fund,  and  be 
divided  monthly  between  the  applicants  and  the  respondents, 
equally,  share  and  share  alike., 

And  it  is  ordered  that  the  said  switch-boards  and  trunk  line 
shall  be  built,  constructed,  and  equipped  and  the  connection 
between  the  telephone  systems  and  lines  of  the  applicants  and 
respondents  shall  be  made  and  completed,  all  within  the  space 
of  two  months  from  the  date  of  this  order. 

And  it  is  further  ordered  that  the  terms  of  this  order  for 
connection,  intercommunication,  joint  operation,  reciprocal  use, 
and  transmission  of  business  between  the  systems  of  the  applicants 
and  respondents  may  be  superseded  with  the  approval  of  this 
Board  by  a mutual  agreement  in  writing  to  be  made  by  and 
between  the  applicants  and  respondents. 

The  McKillop  Municipal  Telephone  System  applied  to  the 
Board  to  set  aside  or  vary  the  order  of  the  10th  March,  1911; 
and  that  application  was  dismissed  by  the  Board  by  order  made 
on  the  5th  May,  1911.  This  was  the  second  order  appealed 
against. 

The  second  appeal  was  by  the  Municipal  Corporation  of  the 
Township  of  McKillop  from  an  order  of  the  Board,  dated  the 
20th  June,  1911,  made  on  the  application  of  the  Municipal  Cor- 
poration of  the  Village  of  Blyth,  naming  the  township  corporation 
as  respondents,  for  an  order  directing  connection,  intercommuni- 
cation, etc.,  between  the  telephone  systems  of  the  applicants  and 
the  respondents. 

The  order  directed,  amongst  other  things,  that  the  township 
corporation  should  build,  maintain,  and  operate  a switch-board 
in  or  adjacent  to  the  town  of  Seaforth,  in  the  county  of  Huron, 
and  should  construct,  build,  and  maintain  a trunk  line  from  the 
town  of  Clinton  on  the  main  gravel  road  between  that  town  and 
the  village  of  Blyth  to  a point  on  the  road  distant  two  and  one- 
half  miles  north  of  the  town  of  Clinton,  being  the  point  up  to 
which  the  village  corporation  were  also  ordered  and  directed  to 
construct  their  portion  of  the  line.  The  township  corporation 


C.  A. 
1912 

Re 

Village  of 
Brussels 
and 

McKillop 

Municipal 

Telephone 

System. 


32 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Re 

Village  of 
Brussels 
and 

McKillop 

Municipal 

Telephone 

System. 


were  also  ordered  to  pay  all  the  cost  of  building,  constructing,  and 
maintaining  the  trunk  line  and  of  equipping  a switch-board  and 
a central  office  in  or  adjacent  to  the  town  of  Seaforth,  and  to  allow 
the  use  of  the  same  and  of  all  their  lines  to  the  village  corporation 
or  any  of  their  subscribers,  on  payment  of  a charge  of  five  cents 
for  each  call  or  connection. 

November  21  and  22, 1911  The  appeals  were  heard  by  Moss, 
C.J.O.,  Garrow,  Maclaren,  Meredith,  and  Magee,  JJ.A. 

M.  K.  Cowan,  K.C.,  and  R.  S.  Hays,  for  the  appellants.  The 
orders  appealed  from  should  be  varied  or  rescinded.  The  appel- 
lants are  operating  municipal  telephone  systems  under  the  pro- 
visions of  the  Local  Municipal  Telephone  Act,  8 Edw.  VII.  ch.  49, 
but  have  no  switch-board  of  their  own,  their  switching  being 
done  by  • the  Bell  Telephone  Company,  under  an  agreement 
approved  by  the  Ontario  Railway  and  Municipal  Board,  in 
accordance  with  the  provisions  of  sec.  10  of  the  Ontario  Telephone 
Act,  1910.  By  the  terms  and  conditions  of  the  orders  appealed 
from,  the  appellants’  systems  will  be  required  to  terminate  their 
agreements  and  connections  with  the  Bell  Telephone  Company, 
and  so  lose  the  rights  and  benefits  they  now  enjoy,  as  well  as 
being  saddled  with  great  additional  expense.  We  submit  that, 
under  sec.  6 of  6 Edw.  VII.  ch.  31,  the  hearing  of  this  case  on  the 
24th  February,  1911,  in  the  presence  of  only  one  member  of  the 
Board,  was  irregular  and  illegal,  and  that  the  Board  had  no 
power  or  authority  to  make  any  order  based  upon  such  a hearing. 
The  facts  adduced  do  not  disclose  the  necessity  of  an  order  as 
asked  for  by  the  respondents.  The  provisions  of  sec.  9 of  the 
Act  of  1910  are  not  intended  to  be  imperative,  requiring  the 
Board  to  make  an  order  in  every  case  applied  for.  If  the  phrase- 
ology of  that  section  appears  to  be  imperative,  its  spirit  is  dis- 
cretionary. Such  discretion  is  a judicial  and  not  an  arbitrary 
one.  We  further  submit  that  the  Board  has  no  jurisdiction 
whatever  to  make  or  to  enforce  the  carrying  out  of  the  orders 
appealed  from;  and,  moreover,  the  appellants  have  no  power  or 
authority  to  raise  further  moneys  for  the  purpose  of  reconstructing 
the  systems  in  compliance  with  the  orders  of  the  Board.  The 
appellants’  systems  are  not  complete  systems,  having  each  one 
central  switch-board  and  main  trunk  lines  running  therefrom, 
within  the  meaning  of  secs.  8 and  9 of  the  Act  of  1910. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


33 


H.  D.  Gamble,  K.C.,  for  the  respondents  the  Corporation  of 
the  Village  of  Blyth.  The  orders  appealed  from  are  right,  and 
should  be  affirmed.  They  do  not  interfere  with  any  agreement 
between  the  Bell  Telephone  Company  and  the  appellants.  See 
the  Ontario  Railway  and  Municipal  Board  Act,  1906,  sec.  17, 
sub-secs.  2 and  3.  Moreover,  the  appellants  do  not  of  necessity 
lose  connection  with  adjacent  townships,  and  they  may  agree  to 
connect  their  system  with  that  of  such  townships,  under  sec.  8 of 
the  Act  of  1910,  or,  in  case  of  refusal,  connection  may  be  ordered 
by  the  Board  under  sec.  9 of  the  same  Act.  The  language  of  the 
Act  of  1910,  sec.  9,  is  imperative;  and  the  Railway  Board  has  no 
option  in  the  matter  of  ordering  connection;  but  the  terms  and 
conditions  upon  which  such  connection  is  brought  about  are  in 
the  sole  discretion  of  the  Board.  Nothing  turns  upon  the  fact 
that  the  agreement  between  the  Bell  Telephone  Company  and  the 
appellants  was  ratified  by  the  Board,  when  it  is  observed  that, 
by  the  order  ratifying,  the  Board  reserves  the  right  to  rescind  or 
vary  it  in  any  way  they  may  desire.  The  question  of  expense  of 
building  and  maintaining  the  necessary  switch-board  and  other 
appliances  for  connection  between  the  appellants’  and  respondents’ 
systems,  be  the  expense  much  or  little,  does  not  give  any  right  to 
appeal.  This,  expense  is  only  a question  of  fact,  part  of  the  terms 
and  conditions  imposed  upon  the  appellants,  and  the  Board’s 
decision  upon  all  matters  of  fact  is  final  and  conclusive.  See 
sec.  41,  sub-sec.  3,  of  the  Ontario  Railway  and  Municipal  Board 
Act,  1906.  As  to  the  proceedings  before  the  Board  on  the  24th 
February,  1910,  we  submit  that  the  appellants  have  no  cause  of 
complaint,  because,  after  the  order  had  been  made,  a rehearing 
of  the  application  was  granted  them,  whereat  the  whole  evidence 
was  gone  over,  and  every  opportunity  was  given  the  appellants 
to  present  their  case  fully.  As  to  the  objection  that  there  is  no 
authority  in  the  statute  by  which  the  expense  of  installing  the 
necessary  equipment  may  be  provided  for  in  order  to  comply 
with  the  order  of  the  Board,  we  submit  that  under  sec.  11,  sub- 
sec. lb,  and  sec.  13,  sub-sec.  6,  of  the  Act  of  1908,  the  appellants 
may  pass  the  necessary  supplementary  by-law  and  levy  the  cost 
upon  the  subscribers ; but,  if  these  sections  do  not  confer  the  right, 
then  the  order  of  the  Board  carries  with  it  the  necessary  authority 
to  raise  the  money,  and  the  Board  may,  under  sec.  20  of  the 


C.  A. 
1912 

Re 

Village  of 
Brussels 
and 

McKillop 

Municipal 

Telephone 

System. 


3 — XXVI.  O.L.R. 


34 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Re 

Village  of 
Brussels 
and 

McKillop 

Municipal 

Telephone 

System. 


Ontario  Railway  and  Municipal  Board  Act,  1906,  build  the 
appellants’  portion  of  the  line,  construct  and  establish  the  neces- 
sary switch-boards  to  complete  the  connection,  and  assess  the 
amount  against  the  appellants;  and,  what  the  Board  may  do 
for  the  appellants,  they  may  do  themselves. 

W.  M.  Sinclair , for  the  respondents  the  Corporation  of  the 
Village  of  Brussels.  The  arguments  advanced  on  behalf  of  Blyth 
apply  with  equal  force  to  the  Brussels  case.  As  to  the  jurisdiction 
of  the  Board,  see  sec.  30  of  the  Ontario  Railway  and  Municipal 
Board  Act,  1906,  and  sub-sec.  3 of  sec.  11  of  the  Local  Municipal 
Telephone  Act,  1908.  Section  43  of  the  Ontario  Railway  and 
Municipal  Board  Act,  1906,  does  not  allow  appeals  on  questions 
of  fact;  and,  therefore,  the  appellants  have  no  right  to  be  here. 

Hays,  in  reply. 


March  6,  1912.  Moss,  C.J.O. : — These  are  appeals  from  orders 
or  decisions  pronounced  by  the  Ontario  Railway  and  Municipal 
Board.  So  far  as  the  respondents  to  the  appeals  are  concerned, 
the  matters  are  separate  and  distinct;  but  substantially  the  same 
questions  are  involved;  and  the  appeals,  which  were  heard  during 
the  same  sittings  of  the  Court,  may  be  conveniently  dealt  with 
together. 

The  first  two  in  point  of  time  of  the  orders  complained  of  were 
pronounced  upon  an  application  made  by  the  Corporation  of 
Brussels,  on  which  they  named  as  respondents  “The  McKillop 
Municipal  Telephone  System.”  This  was  not  a proper  proceed- 
ing. While  it  seems  that  there  is  an  association  of  individual 
subscribers  who  for  convenience  act  under  that  name,  it  does  not 
appear  that  there  is  any  corporate  body  or  company  known  to 
the  law  capable  of  responding  by  that  name  to  the  application 
made  by  Brussels  to  the  Board  for  the  orders  now  in  question. 
Having  been  constructed  and  installed  in  1908,  under  the  pro- 
visions of  the  Local  Municipal  Telephone  Act,  1908,  the  system 
and  all  works  and  property  acquired,  erected,  or  used  in  connec- 
tion therewith,  became  vested  in  the  Municipality  of  McKillop 
in  trust  for  the  benefit  of  the  subscribers.  The  opposition  to  the 
application  was  made  through  the  municipality;  but  it  may  be 
questioned  whether,  in  the  form  in  which  the  proceedings  now 
stand,  the  orders  made  could  be  effectively  enforced,  if  capable 
of  enforcement  under  any  circumstances. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


35 


But  more  formidable  objections  appear  when  the  substantial 
questions  between  the  parties  are  examined. 

The  respondents  the  Corporation  of  the  Village  of  Brussels, 
as  trustees  for  the  subscribers  of  the  local  telephone  system 
known  as  the  Brussels  Morris  and  Grey  Telephone  System,  made 
application  in  October,  1910,  to  the  Ontario  Railway  and  Muni- 
cipal Board  for  an  order  for  connection,  intercommunication,  or 
reciprocal  use  in  the  transmission  of  business  between  the  tele- 
phone systems  of  the  respondents  and  the  appellants.  The 
applicants  alleged  that  their  system  was  located  in  the  territory 
immediately  adjacent  to  the  appellants’;  and  that  they  had  been, 
for  some  months  previous  to  their  application,  desirous  of  entering 
into  an  agreement  with  the  appellants  for  such  connection,  inter- 
communication, or  reciprocal  use;  but  the  latter  had  declined  to 
do  so.  Apparently,  the  application  was  based  upon  sec.  9*  of  the 
Ontario  Telephone  Act,  1910 — 10  Edw.  VII.  ch.  84 — which  seems 
to  be  the  only  enactment  that  affords  any  warrant  for  the  applica- 
tion. 


C.  A. 
1912 

Re 

Village  of 
Brussels 

AND 

MoKillop 

Municipal 

Telephone 

System. 

Moss,  C.J.O. 


It  is  very  difficult,  however,  to  give  any  intelligible  meaning 
to  the  language  of  the  section.  Read  literally,  it  does  not  compre- 
hend this  case;  on  the  contrary,  it  would  seem  to  be  providing 
for  some  case  of  a company  or  person,  as  defined  by  sec.  2 (c)f  of 
the  Act,  having  two  or  more  systems  or  lines  “ located  in 
territory  adjacent  to  each  other.”  Doubtless,  this  was  not  the 
intention;  but,  in  the  present  form  of  the  section,  the  real  intention 
is  not  clearly  expressed.  The  order  of  the  Board  dated  the  10th 
March,  1911,  which  directs  connection,  intercommunication, 
joint  operation,  reciprocal  use,  and  transmission  of  business,  pur- 
ports to  be  made  in  pursuance  of  sec.  9;  but,  as  pointed  out  above, 

*9.  Wherever  the  telephone  systems  or  lines  of  any  company  or  person 
are  located  in  territory  adjacent  to  each  other  and  in  the  event  of  any 
company  or  person  owning,  controlling,  or  operating  one  or  more  of  the  said 
telephone  systems,  refusing  or  neglecting  to  enter  into  an  agreement  for 
any  or  all  of  the  purposes  mentioned  in  the  next  preceding  section,  the  Board 
shall  issue  an  order  providing  for  such  connection,  intercommunication, 
joint  occupation,  reciprocal  use,  or  transmission  of  business  upon  such  terms 
and  conditions  as  it  may  deem  advisable. 

f 2.  (c)  “Company  or  Person”  shall  mean  any  Company,  Corporation, 

Municipal  Corporation,  Association,  individual  or  aggregation  of  individuals 
owning,  controlling,  or  operating  a telephone  system  or  lines  within  the 
Province  of  Ontario,  and  not  within  the  legislative  authority  of  the  Parlia- 
ment of  Canada. 


36 

C.  A. 
1912 

Re 

Village  of 
Brussels 
and 

MoKillop 

Municipal 

Telephone 

System. 

Moss,  C.J.O. 


ONTARIO  LAW  REPORTS.  [vol. 

that  section  is  halting  and  uncertain  in  expression;  and,  in  strict- 
ness, it  does  not  confer  jurisdiction  in  this  particular  case. 

There  still  remains  the  question  of  jurisdiction  dependent 
upon  the  existence  of  an  agreement  between  the  appellants  and 
the  Bell  Telephone  Company,  substantially  for  the  purposes 
recognised  and  authorised  by  sec.  8*  of  the  Ontario  Telephone 
Act,  1910,  and  which  had  been  approved  of  by  the  Board  prior 
to  the  application  by  Brussels. 

The  appellants  and  the  Bell  Telephone  Company  were  working 
under  this  agreement  when  the  orders  now  in  question  were  made 
by  the  Board.  It  is  said  that  there  was  no  intention  to  interfere 
with  that  agreement,  and  that  there  is  in  fact  no  interference 
with  it. 

But  it  is  obvious  that  compliance  with  the  order  by  the  appel- 
lants does  seriously  alter  their  relations  with  the  Bell  Telephone 
Company.  It  exposes  them  to  the  consequences  of  a breach  of 
the  agreement,  and  may  deprive  them  of  the  benefits  and  advan- 
tages which  they  now  enjoy  under  it.  And,  while  the  agreement 
remains  as  an  existing  agreement  sanctioned  and  approved  by 
the  Board,  the  Bell  Telephone  Company  are  entitled  to  assert 
their  rights  under  it  and  to  claim  that  they  should  remain  undis- 
turbed and  unaffected  as  long  as  the  agreement  stands.  The 
Board  has  undoubted  power  to  rescind  the  order  for  good  cause, 
but  the  jurisdiction  to  do  so  should  be  exercised  only  upon  a 
properly  framed  application  for  that  purpose,  to  which  all  those 
who  are  interested  are  parties  or  of  which  they  are  properly 
notified. 

At  present,  the  agreement  is  a valid  subsisting  agreement; 
and,  while,  upon  an  application  regularly  framed  and  constituted 
as  to  parties,  the  Board  may  determine  its  true  meaning,  yet 
while  it  stands  the  Board  is  without  power  or  jurisdiction  to 
alter  or  vary  it. 

* 8.  Subject  to  the  approval  of  the  Board  every  company  or  person  shall 
have  power  to  enter  into  any  agreement  or  agreements  with  any  other 
company  or  person  for  the  purpose  of  providing  for  connection,  intercom- 
munication, joint  operation,  reciprocal  use,  or  transmission  of  business  as 
between  the  respective  systems  controlled,  owned  or  operated  by  such 
companies  or  persons,  and  may  make  such  arrangements  as  shall  be  deemed 
advisable  for  the  proper  apportionment  of  expenditures  and  commissions, 
the  division  of  receipts  and  profits,  or  such  other  adjustments  as  may  be 
necessary  under  any  such  agreement. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


37 


And  the  important  question  is,  whether  the  Board  has,  in 
the  present  state  of  the  legislation,  any  power  or  jurisdiction  to 
order  the  performance  of  work  of  construction  and  connection 
with  the  Brussels  system,  involving  the  expenditure  of  money 
upon  capital  account  by  the  subscribers  to  the  appellants’  system. 
There  are  no  express  provisions  covering  such  a case;  and  the 
different  sections  to  which  we  were  referred  by  counsel  for  the  re- 
spondents fall  far  short  of  supplying  the  necessary  machinery 
for  imposing  or  collecting  funds  to  meet  the  outlay  which  obedience 
to  the  orders  imposes. 

Apart  from  these  latter  considerations,  however,  the  want  of 
jurisdiction  to  deal  with  the  application  made  on  behalf  of  Brussels, 
based  upon  the  other  grounds  referred  to,  is  sufficient  reason  for 
allowing  the  appeal. 

There  is  no  difference  in  substance  between  the  case  of  Brussels 
and  the  case  of  the  application  by  the  Corporation  of  the  Village 
of  Blyth.  Except  as  to  the  form  of  the  application  with  respect 
to  the  parties  respondent,  all  the  objections  to  the  power  and 
jurisdiction  of  the  Board  apply  with  the  same  force  as  in  the 
Brussels  case.  The  order  complained  of  in  the  Blyth  case  is  to 
the  same  effect  as  that  pronounced  in  the  Brussels  case.  The 
appeal  is  on  the  same  grounds,  and  the  result  should  be  the  same. 

Both  appeals  should  be  allowed,  and  the  orders  complained 
of  be  set  aside  with  costs  to  the  appellants  in  each  case. 


C.  A. 
1912 

Re 

Village  of 
Brussels 
and 

MoKillop 

Municipal 

Telephone 

System. 

Moss,  C.J.O. 


Garrow,  J.A.,  concurred. 

Maclaren,  J.A.  (Brussels  case): — This  is  an  appeal  by  the 
Corporation  of  the  Township  of  McKillop,  representing  the 
subscribers  to  the  municipal  telephone  system  of  the  township, 
on  leave  granted  by  the  Court,  from  an  order  of  the  Ontario 
Railway  and  Municipal  Board  of  the  10th  March,  1911,  ordering 
the  appellants  to  build  and  operate  a switch-board  in  or  adjacent 
to  the  town  of  Seaforth  and  a trunk  telephone  line  therefrom  to  a 
point  half-way  between  Seaforth  and  Brussels,  there  to  connect 
with  the  Brussels  line  to  that  village;  and  from  an  order  of  the 
said  Board  of  the  5th  May,  1911,  refusing  to  vary  or  rescind  the 
order  of  the  10th  March. 

The  appellants  were  organised  under  sec.  11  of  the  Local 
Municipal  Telephone  Act,  1908,  8 Edw.  VII.  ch.  49,  but  have  no 


38 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Re 

Village  of 
Brussels 

AND 

MoKillop 

Municipal 

Telephone 

System. 

Maclaren,  J.A. 


switch-board  of  their  own,  their  switching  being  done  by  the 
Bell  Telephone  Company,  in  Seaforth,  under  an  agreement  which 
was  duly  approved  by  the  said  Board  in  accordance  with  the  pro- 
visions of  sec.  10  of  the  Ontario  Telephone  Act,  1910,  10  Edw. 
VII.  ch.  84.  Section  11  of  this  Act  provides  that  no  company  or 
person  owning  such  a telephone  system  or  lines  shall  enter  into 
any  contract,  agreement,  or  arrangement  with  any  other  com- 
pany having  authority  to  construct  or  operate  a telephone  system 
or  line,  restricting  competition  in  the  supply  of  such  service, 
unless  the  same  is  just  and  reasonable,  and  until  such  contract, 
agreement,  or  arrangement  has  been  submitted  to  and  received 
the  assent  of  the  Board. 

The  said  agreement  contained  a provision  that  during  its 
continuance  the  appellants  should  not  connect  their  telephone 
system  with  the  system  of  any  company  or  persons  operating  in 
competition  with  the  Bell  Telephone  Company,  and  without  the 
consent  of  the  Bell  Telephone  Company;  and  it  appeared  that  the 
applicants  in  this  matter  operated  in  opposition  to  the  Bell  Tele- 
phone Company,  and  that  the  latter  refused  the  appellants  the 
right  to  connect  their  system  with  that  of  the  applicants. 

The  applicants  relied  upon  a clause  in  the  approval  of  the 
Board,  to  the  effect  that  the  right  of  revoking  or  varying  the  order 
was  reserved;  but,  in  my  opinion,  such  reservation  does  not  confer 
any  greater  power  upon  the  Board  than  is  found  in  the  Ontario 
Railway  and  Municipal  Board  Act,  1906,  6 Edw.  VII.  ch.  31,  sec. 
19  (4),  which  says  that  “The  Board  may  review,  rescind,  change, 
alter  or  vary  any  rule,  regulation,  order  or  decision  made  by  it.” 


By  sec.  14  of  the  Ontario  Telephone  Act,  1910,  it  is  expressly 
enacted  that  the  Board  shall  not  have  the  power  “to  alter  or 
vary  any  agreement  between  a municipal  corporation  and  a 
company,  or  between  two  or  more  companies  or  persons.”  What 
they  cannot  do  directly,  I do  not  think  they  can  do  indirectly  or 
by  a side  wind,  as  is  attempted  by  the  orders  now  appealed  from. 

The  agreement  between  the  McKillop  telephone  subscribers, 
which  must  have  been  found  by  the  Board  to  have  been  just 
and  reasonable  when  they  gave  it  their  approval,  should  stand 
until,  after  proper  notice  to  the  parties,  they  have  an  opportunity 
of  stating  their  objections  to  the  variance  or  revocation  of  such 
approval.  So  long  as  such  approval  stands  unchanged  and  unre- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


39 


yoked,  I am  of  opinion  that  the  Board  is  without  jurisdiction  to 
pass  such  orders  as  are  now  in  appeal. 

I do  not  consider  it  necessary  at  present  to  consider  the  other 
matters  argued  before  us,  or  to  express  any  opinion  as  to  whether 
or  not  the  orders  in  question  would  be  a compliance  with  the  pro- 
visions of  sec.  9 of  the  Ontario  Telephone  Act,  1910,  even  if  the 
above  objection  did  not  exist. 

In  my  opinion,  the  appeal  should  be  allowed. 

(Blyth  case.)  The  same  objection  applies  to  the  order  of 
the  Ontario  Railway  and  Municipal  Board  in  this  case  as  in  the 
Brussels  case;  and,  for  the  reasons  given  therein,  I am  of  opinion 
that  the  appeal  should  b^  allowed  and  the  orders  set  aside. 


C.  A. 
1912 

Re 

Village  of 
Brussels 

AND 

MoKillop 

Municipal 

Telephone 

System. 

Maclaren,  J.A. 


Meredith,  J.A.  (Brussels  case) The  appellants  have  a 
local  telephone  system  which  satisfies  all  their  needs;  and  they 
are  naturally  opposed  to  any  action  which  would  disturb  that 
system  or  the  very  satisfactory  arrangements  made  between 
them  and  the  Bell  Telephone  Company,  under  which  the  appel- 
lants’ lines  are  operated  by  the  company  and  under  which  the 
subscribers  to  the  appellants’  system  are  also  given  intercommun- 
ication with  the  company’s  subscribers ; and  under  which  arrange- 
ments the  appellants  are  bound  not  to  make  connection  with  any 
other  system. 

Upon  an  application  made  by  the  respondents  to  the  Ontario 
Railway  and  Municipal  Board,  which  was  heard  by  one  member 
of  the  Board  only,  an  order  was  made  requiring  the  appellants  to 
connect  their  system  with  that  of  the  respondents,  and  to  give 
intercommunication  between  the  subscribers  of  each,  and,  for 
that  purpose,  to  build  and  operate  a trunk  line  and  a switch- 
board— which  would,  of  course,  necessitate  providing  also  a 
room,  light,  and  heat  sufficient  for  the  purpose.  The  order,  if 
obeyed,  would  compel  the  appellants  to  break  their  agreement 
with  the  Bell  Telephone  Company  and  put  an  end  to  all  their 
rights  and  benefits  under  it,  obliging  them  to  operate  their  own 
lines  at  very  considerable  continued  expense,  in  addition  to  the 
very  considerable  expense  of  doing  the  work  ordered  to  be  done 
by  them;  entirely  reversing  their  policy  in  the  operation  of  their 
lines  and  making  the  operation  much  more  costly,  as  well  as 
depriving  them  of  the  benefits  of  intercommunication  with  the 
Bell  Telephone  Company’s  subscribers;  unless,  indeed,  that 


40 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Re 

Village  of 
Brussels 
and 

McKillop 

Municipal 

Telephone 

System. 

Meredith,  J.A. 


company  should  see  fit  to  make  some  other  agreement  with 
them,  which  neither  they  nor  the  Board  would  gave  any  power 
to  compel. 

If  the  Board  had  the  power  to  do  this  injustice,  the  appel- 
lants must  submit  to  it,  as  well  as  must  the  Bell  Telephone  Com- 
pany, for  in  that  case  there  would  be  no  right  of  appeal;  but,  if 
the  Board  had  no  such  power,  this  Court  can  and  must  relieve 
the  appellants  from  it:  and  the  power  to  make  such  an  order 
ought  to  be  made  to  appear  with  very  reasonable  clearness  to  be 
upheld  in  this  Court;  but  I am  unable  to  find,  in  all  the  legislation 
upon  the  subject,  sufficient  authority  to  support  it. 


The  first  question  that  strikes  the  mind,  in  dealing  with  the 
case,  is:  where  is  the  money  to  come  from  which  must  be  ex- 
pended in  obeying  the  order?  And  it  must  be  borne  in  mind 
that,  if  the  power  exist,  there  is  no  limit  of  the  amount  which  the 
Board  may  thus  require  to  be  expended;  it  may  be  little  in  one 
case,  but  it  may  be  very  great  in  another,  and  that  quite  apart 
from  any  damages  any  one  might  be  compelled  to  pay  for  breach 
of  contract  such  as  that  involved  in  this  case.  I have  been  unable 
to  find  any  source  from  which  the  money  which  must  be  paid 
out,  if  the  order  in  appeal  is  complied  with,  is  to  come;  and  I 
cannot  help  thinking  that,  if  the  subscribers  to  such  systems 
could  be  so  made  personally  liable,  they  might  go  a long  time  with- 
out the  advantages  of  a telephone  rather  than  run  the  risk  of  being 
burdened  with  the  cost  of  doing  that  which  is  altogether  against 
their  wishes,  and  that  which  they  believe  to  be  their  best  interests, 
upsetting  their  whole  plan  of  operation,  compelling  a breach  of 
their  contract,  with  whatever  consequences  might  follow  from  it, 
as  well  as  requiring  them  to  do  that  which  they  have  carefully 
provided  against — operate  their  own  system.  The  cost  of  con- 
structing and  maintaining  a system  is  to  be  paid  by  the  “ init- 
iating municipality/’  and  may  be  recovered  from  the  subscribers 
in  the  manner  provided  for  in  the  enactments;  but  such  “cost” 
must,  I think,  under  the  words  of  the  enactment,  as  well  as  the 
reasonableness  of  the  thing,  be  limited  to  the  construction  and 
maintenance  of  the  system  as  contemplated  and  desired  by  the 
subscribers,  and  which  they  have  petitioned  the  municipality 
to  undertake  for  them,  and  riot  a different  system  which  they  do 


XXVI.] 


ONTARIO  LAW  REPORTS. 


41 


not  desire,  but  which  some  other  system  endeavours  to  force 
upon  them;  and,  of  course,  there  is  no  warrant  for  compelling  the 
municipality  to  pay  without  recoupment. 

It  may  very  well  be  that  the  Board  would  have  power  to 
order  connection  and  intercommunication  where  the  applicants 
were  willing  to  pay  the  cost  of  making  the  connection  and  where 
it  could  be  done  without  inflicting  upon  any  party  such  injustice 
as  the  appellants  reasonably  complain  of  in  this  case.  I can 
find  no  sufficient  authority  for  an  order  which  has  the  effect  of 
the  order  made  in  this  case;  nor  is  there  any  need  for  it. 

There  is  no  good  reason  why  the  respondents  should  not  make 
arrangements  with  the  Bell  Telephone  Company  similar  to  those 
made  by  the  appellants  with  that  company,  arrangements 
which  evidently  could  be  made  at  much  less  cost  and  which  would 
not  only  give  the  respondents  all  they  sought  in  this  application, 
but  also  intercommunication  with  the  company’s  subscribers  as 
well;  but  that  they  would  not,  because,  I have  no  doubt,  of  some 
feeling  against,  and  concerted  opposition  to,  that  company, 
to  give  effect  to  which  the  appellants  are  to  be  driven  from  their 
alliance  with  it,  and  compelled,  at  great  cost,  to  establish  switching 
stations  and  operate  their  own  lines,  as  well  as  to  lose  the  benefit 
of  intercommunication  over  the  Bell  system,  and  take  the  conse- 
quences of  a breach  of  the  agreement  with  the  company. 

For  two  other  reasons,  I am  also  of  opinion  that  the  order 
cannot  stand:  (1)  there  was  no  power  in  one  member  of  the  Board 
to  hear  the  application  and  make  the  order;  and  (2)  the  applica- 
tion should  have  been  made  against  the  municipality,  not  against 
the  “system, ” which  is  not  a legal  entity:  and  there  is  still  another 
reason,  which  I shall  mention  in  dealing  with  the  like  case  of 
Blyth  and  McKillop. 

The  order  should,  I think,  be  rescinded  for  want  of  juris- 
diction. 

(Blyth  case.)  This  case  is  quite  the  same  as  the  Brussels 
case,  in  which  I have  just  expressed  my  opinion,  except  in  these 
respects:  (1)  the  initiating  municipality  is  properly  proceeded 
against;  and  (2)  the  application  was  heard,  and  the  order  made, 
by  the  full  Board:  and,  therefore,  all  that  I have  said  in  the  other 
case,  except  in  these  respects,  applies  fully  to  this  case:  but  I 


C.A. 

1912 

Re 

Village  of 
Brussels 
and 

MoKillop 

Municipal 

Telephone 

System. 

Meredith,  J.A. 


42 


ONTARIO  LAW  REPORTS.  [vol. 


G.  A. 
1912 

Re 

Village  of 
Brussels 

AND 

McKillop 

Municipal 

Telephone 

System. 

Meredith,  J.A. 


desire  to  add  a few  observations  now,  applicable  alike  to  each 
case. 

The  Bell  Telephone  Company  are  materially  affected  by  the 
order;  and,  according  to  first  principles  in  the  administration  of 
justice,  ought  to  have  been  given  an  opportunity  of  being  heard 
upon  the  application:  they  might  have  desired  to  oppose  it  upon 
the  merits,  if  the  Board  had  jurisdiction:  and  they  might  also 
have  desired  to  contend,  and  possibly  might  have  been  able  to 
convince  the  Board,  that  the  order  sought  would  be  one 
substantially  affecting  rights  in  them,  over  which,  not  being  a 
provincial  corporation,  the  Board  had  no  power:  see  sec.  2 (c) 
of  the  Ontario  Telephone  Act,  1910. 

This  appeal  should,  therefore,  be  dealt  with  in  the  same 
manner  as  the  other. 


Magee,  J.A.: — Looking  at  the  provision  for  extensions  in 
secs.  5,  7,  and  11  of  the  Local  Municipal  Telephone  Act,  1908, 
and  the  provisions  for  connection  and  switch-boards  in  secs.  10 
and  11,  and  the  amendments  in  1910  and  1911  by  10  Edw.  VII. 
ch.  92,  secs.  1 and  4,  and  1 Geo.  V.  ch.  56,  sec.  2 (13  a.,  (5),  (6)), 
I am  inclined  to  think  the  council  would  be  entitled  to  collect 
from  the  subscribers  the  additional  cost  imposed  upon  it  by 
law.  It  would  appear  to  be  one  of  the  risks  run  by  those  who 
invoke  for  their  private  convenience  the  authority  of  the  muni- 
cipality to  use  the  highways  for  the  poles  and  lines,  and  break, 
dig,  and  trench  the  same,  or  private  property,  that  they  may  be 
called  upon  to  submit  to  more  extension  and  expense  and  a wider 
connection  than  they  originally  contemplated.  As  the  munici- 
pality is,  under  sec.  10,  authorised  to  enter  into  agreements  for 
connection  with  other  systems,  I would  think  that,  under  sec.  4 
of  the  Ontario  Telephone  Act,  1910,  the  Board  would  have  power 
to  order  it  to  do  so. 

But,  for  the  other  reasons  stated  by  my  Lord  the  Chief  Justice, 

I agree  that  the  appeals  should  be  allowed. 


Appeals  allowed. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


43 


[DIVISIONAL  COURT.] 

Rice  v.  Galbraith 

Principal  and  Agent — Agent’s  Commission  on  Sale  of  Land — Employment 
of  Agent  to  Find  Purchaser — Vendor  and  Purchaser  Brought  together 
\ by  Intervention  of  Agent — Sale  Effected  by  Vendor  without  Know- 
ledge of  Agent’s  Introduction  of  Purchaser. 

Where  the  defendant  employed  the  plaintiffs,  who  were  brokers,  to  sell  his 
property,  and  imposed  no  time-limit,  and  never  revoked  their  authority 
to  find  a purchaser.,  and  the  plaintiffs  brought  the  property  to  the  notice 
of  one  who  became  the  purchaser,  though  the  negotiations  were  not 
conducted  by  the  plaintiffs,  and  the  defendant,  when  lie  closed  the 
transaction,  did  not  know  that  the  plaintiffs  had  brought  the  property 
to  the  notice  of  the  purchaser:  — 

Held,  that  the  plaintiffs  were  entitled  to  a commission  upon  the  sale-price. 
Review  of  the  authorities. 

Wilkinson  v.  Alston  (1879),  48  L.J.Q.B.  733,  applied  and  followed. 
Locators  v.  Clough  (1908),  17  Man.  L.R.  659,  disapproved. 

Judgment  of  Denton,  Jun.  Co.  C.J.,  York,  reversed. 

Appeal  by  the  plaintiffs  from  the  judgment  of  Denton, 
Jun.  Co.  C.J.,  dismissing  an  action  in  the  County  Court  of  the 
County  of  York  for  commission  on  the  sale-price  of  the  defendant’s 
land,  upon  a sale  brought  about  by  the  efforts  of  the  plaintiffs 
as  the  defendant’s  agents  for  sale,  as  they  alleged. 

February  16.  The  appeal  was  heard  by  a Divisional  Court 
composed  of  Clute,  Latchford,  and  Sutherland,  JJ. 

G.  H.  Kilmer,  K.C.,  for  the  plaintiffs.  In  the  Court  below 
the  case  was  decided  in  favour  of  the  defendant,  on  the  ground 
that  he  did  not  know,  when  he  sold  to  the  purchaser,  that  she 
was  the  plaintiffs’  client.  Assuming  the  facts,  which  are  not 
open  to  dispute,  that  the  defendant  employed  the  plaintiffs  to 
sell  the  property,  and  that  the  plaintiffs  brought  it  to  the  notice 
of  the  purchaser,  their  right  to  the  commission  is  established, 
and  is  not  affected  by  the  fact  that,  when  the  defendant  sold  the 
property,  he  did  not  know  that  the  purchaser  was  the  client  of  the 
plaintiffs:  Sager  v.  Sheffer  (1911),  2 O.W.N.  671,  and  the  case 
there  cited  of  Wilkinson  v.  Alston  (1879),  48  L.J.Q.B.  733;  Bur- 
chell  v.  Gowrie  and  Blockhouse  Collieries  Limited,  [1910]  A.C. 
614.  The  learned  trial  Judge  relied  on  the  case  of  Locators  v. 
Clough  (1908),  17  Man.  L.R.  659;  but  it  is  submitted  that  the 
authorities  above  cited  should  be  followed  in  preference  to  the 
Manitoba  case. 

J.  J.  Maclennan,  for  the  defendant,  argued  that  the  Manitoba 
case  was  absolutely  in  point,  and  should  be  followed.  The  agent, 


D.  C. 
1912 

March  8. 


t 


ONTARIO  LAW  REPORTS.  [vol. 

in  order  to  be  entitled  to  a commission,  must  do  more  than 
merely  say  that  certain  premises  are  for  sale — he  must  be  the 
efficient  cause,  the  causa  causans,  of  the  transaction : Burchell  v. 

Galbraith.  Gowrie  and  Blockhouse  Collieries  Limited,  supra,  in  which  case 
the  agent  was  an  active  intermediary,  and  did  more  than  merely 
introduce  the  purchaser.  Locators  v.  Clough,  supra,  was  an 
unanimous  judgment  of  the  Manitoba  Court  of  Appeal,  and 
shews  that  the  onus  is  on  the  plaintiffs  to  shew  that  but  for  their 
intervention  the  sale  would  not  have  taken  place.  He  also 
referred  to  Stratton  v.  Vachon  (1911),  44  S.C.R.  395,  per  Duff,  J., 

, at  p.  406,  where  he  refers  to  Lord  Atkinson’s  judgment  in  the 
Burchell  case,  at  p.  624.  [Sutherland,  J.,  referred  to  Singer  v. 
Russell  (1912),  25  O.L.R.  444.] 

Kilmer,  in  reply,  argued  that  the  plaintiffs  had  rendered  valu- 
able service  to  the  defendant  in  connection  with  the  sale,  and 
referred  particularly  to  the  judgment  of  Cotton,  L.J.,  in  the 
Wilkinson  case,  at  p.  736. 

March  8.  Clute,  J.: — The  action  is  for  a commission  on 
the  sale  of  land.  The  defendant  listed  the  property  with  the 
plaintiffs,  real  estate  brokers,  in  Toronto,  for  sale.  It  is  clearly 
established  that  the  plaintiffs  brought  the  property  to  the  notice 
of  Mrs.  Rough,  who  subsequently  became  the  purchaser.  The 
house  was  examined  by  her  at  the  instance  of  the  plaintiffs.  Mrs. 
Rough  is  under  the  impression  that  her  attention  was  first  brought 
to  the  house  at  the  instance  of  her  brother-in-law,  Mr.  Blackie; 
but  in  this,  I think,  she  is  mistaken;  and  the  Judge,  while  not 
deciding  the  point,  seemed  also  inclined  to  that  view. 

Subsequently,  another  brother-in-law  of  hers  got  in  communi- 
cation with  one  of  the  builders,  and  so  with  the  defendant,  Gal- 
braith, and,  acting  for  Mrs.  Rough,  finally  agreed  upon  the 
purchase-price,  which  was  $100  less  than  the  defendant  had 
instructed  the  plaintiffs  to  accept. 

Upon  the  evidence,  there  can  be  no  reasonable  doubt  that  it 
was  through  the  action  of  the  plaintiffs  that  the  defendant  got 
in  communication  with  the  purchaser;  and  so  I think  it  may  be 
fairly  found  upon  the  evidence  that  the  sale  would  not  have  been 
brought  about  but  for  the  action  of  the  plaintiffs.  But  it  is 
said,  and  the  judgment  below  proceeds  upon  this  sole  ground, 
that  the  sale  was  in  fact  made  by  the  defendant  without  knowing 


44 


D.  C. 
1912 


Rice 

15. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


45 


at  the  time  that  the  attention  of  the  purchaser  had  been  brought 
to  the  premises  by  the  plaintiffs.  Upon  this  ground  the  trial 
Judge  found  for  the  defendant,  following  Locators  v.  Clough , 
17  Man.  L.R.  659.  The  judgment  is  by  the  Court  of  Appeal. 
Phippen,  J.A.,  by  whom  the  judgment  of  the  Court  was  given, 
sa}^s:  “I  have  no  doubt  that  had  the  defendant  sold  with  knowl- 
edge that  the  property  had  been  introduced  to  Forrest  by  the 
plaintiffs,  he  would  be  liable  for  some  commission.  I cannot, 
however,  hold  that  the  mere  introduction  of  the  property  to 
Forrest  without  endeavouring  to  negotiate  or  in  fact  negotiating 
a sale  is  itself  an  earning  of  the  agreed  commission,  the  owner 
effecting  a sale  on  terms  less  favourable  than  those  expressed 
in  the  commission  contract,  in  ignorance  of  the  plaintiffs’  action 
and  under  circumstances  which  did  not  place  him  upon  inquiry.” 

I do  not  take  this  to  be  the  law.  A number  of  the  cases 
bearing  upon  this  point  are  referred  to  in  Sager  v.  Sheffer,  2 O.W.N. 
671.  It  has  been  held  sufficient  in  most  cases  that  the  agent  has 
been  instrumental  in  bringing  the  purchaser  and  vendor  together, 
although  the  negotiations  are  subsequently  conducted  exclusively 
by  the  parties.  “If  the  relation  of  buyer  and  seller  is  really 
brought  about  by  the  act  of  the  agent,  he  is  eiititled  to  commission 
although  the  actual  sale  has  not  been  effected  by  him:”  Green  v. 
Bartlett  (1863),  14  C.B.  N.S.  681,  685;  Steere  v.  Smith  (1885), 
2 Times  L.R.  131.  “It  is  sufficient  if  the  purchaser  becomes 
such  through  the  agent’s  intervention:”  Mansell  v.  Clements 
(1874),  L.R.  9 C.P.  139.  Wilkinson  v.  Alston,  48  L.J.  Q.B.  733, 
is  a very  strong  case  in  the  plaintiffs’  favour.  This  was  not 
referred  to  in  the  Manitoba  case. 

The  recent  case  of  Burchett  v.  Gowrie  and  Blockhouse  Collieries 
Limited,  [1910]  A.C.  614,  was  applied  in  Stratton  V.  Vachon,  44 
S.C.R.  395.  The  last  case  proceeds  upon  the  ground  that  the 
agent  had  brought  the  owner  into  relation  with  the  person  who 
finally  became  the  purchaser,  and  was,  therefore,  entitled  to  the 
customary  commission. 

The  plaintiffs  having  brought  the  parties  together  and  a sale 
having  been  effected  by  their  intervention,  it  is  not  sufficient, 
in  my  opinion,  to  disentitle  them  to  a commission  to  say  that 
the  vendor  had  proceeded  with  his  negotiations  with  the  pur- 


D.  C. 
1912 

Rice 

v. 

Oaxjbeaith. 

Clute,  J. 


46 

D.  C. 
1912 

Rice 

v. 

Gaolbraith. 
Clute,  J. 


ONTARIO  LAW  REPORTS.  [vol. 

chaser  without  the  knowledge  that  the  agents  had  been  instru- 
mental in  bringing  the  parties  together. 

I think  this  point  was  involved  in  the  decision  in  the  Wilkinson 
case.  After  various  negotiations,  in  that  case,  the  sale  was  finally 
made  by  the  agent  writing  a letter  to  a broker  reminding  him  that 
the  vessel  was  for  sale.  The  broker  took  no  notice  of  this  letter, 
and  neither  the  plaintiff  nor  the  defendant  was  aware  that  the 
letter  was  written,  but  subsequently  the  broker  wrote  to  the 
defendant,  and  afterwards  disclosed  the  name  of  the  principal 
for  whom  he  was  acting,  and  the  sale  was  then  effected.  Bramwell, 
L.J.,  put  the  case  very  broadly:  “The  defendant  practically  said 
to  the  plaintiff,  ‘If  you  or  White  can  find  me  a purchaser,  and 
the  purchase  is  completed,  I will  pay  you  a commission/  And 
the  expression,  ‘If  you  can  find  a purchaser,’  may  be  explained 
as  meaning,  if  you  can  introduce  a purchaser  to  myself,  or  can 
introduce  a purchaser  to  the  premises,  or  call  the  premises  to  the 
notice  of  the  purchaser.” 

The  decision  of  the  Commission  of  Appeals,  New  York,  is 
to  the  same  effect,  Lloyd  v.  Matthews  (1872),  51  N.Y.  124.  There 
the  objection  was  taken  that  the  seller  is  entitled  to  know  that  the 
party  with  whom  he  is  dealing  is  a customer  of  the  broker,  if 
such  be  the  fact.  In  dealing  with  this  objection,  Lott,  Ch.C., 
said:  “The  sixth  proposition  is  not  correct.  It  is  to  be  understood, 
in  the  connection  in  which  it  is  presented,  as  declaring  that, 
although  a party  is  brought,  through  the  agency  and  instrumenta- 
lity of  the  broker,  into  a negotiation  and  dealing  with  the  owner, 
which  actually  results  in  a sale,  yet  the  broker  is  not  entitled  to 
compensation,  unless  it  is  made  known  to  the  owner  that  the 
purchaser  is  his  customer.  That  is  not  true.  It  is  sufficient 
that  the  purchaser  is  in  fact  such  customer.” 

With  respect,  I think  the  judgment  appealed  from  should  be 
set  aside  and  judgment  entered  for  the  plaintiffs  for  the  amount 
of  their  commission,  with  costs  here  and  below. 

Latchford,  J.: — That  the  defendant  employed  the  plaintiffs 
to  sell  the  property  is  found  as  a fact  by  the  learned  trial  Judge. 
The  finding  is  amply  supported  by  evidence,  though  denied  upon 
oath  by  Mr.  Galbraith.  No  limit  as  to  time  was  imposed  when 
authority  to  find  a purchaser  was  given,  nor  was  that  authority 
ever  revoked.  It  is  satisfactorily  established  that  the  property 


XXVI.] 


ONTARIO  LAW  REPORTS. 


47 


was  brought  to  the  notice  of  the  purchaser  by  the  plaintiffs. 
They  sent  her  a list  of  houses,  which  included  the  defendant’s, 
and  took  her  to  examine  his  house.  The  proceedings  subsequent 
to  the  introduction  of  the  property  to  the  purchaser  were  conducted 
without  further  intervention  by  the  plaintiffs;  and  the  defend- 
ant, when  he  closed  the  transaction,  was  not  aware  that  the  pur- 
chaser had  been  introduced  to  the  property  by  the  only  agents 
with  whom  he  had  placed  it  for  sale. 

The  contract  between  the  defendant  and  the  plaintiffs  was 
that  he  would  pay  a commission  if  they  would  find  a purchaser. 
To  apply  the  words  of  Lord  Justice  Brett  in  Wilkinson  v.  Alston , 
48  L.J.  Q.B.  733,  they  would  in  point  of  law  fulfil  the  contract  if 
they  introduced  the  property  to  the  notice  of  the  purchaser  and 
the  latter  purchased  it  in  consequence  of  that  introduction,  though 
all  proceedings  subsequent  to  that  introduction  were  carried  on 
between  the  principals  without  any  further  intervention  by  the 
agents.  It  would  be  impossible  to  find  authority  more  directly 
in  point.  The  case  does  not  appear  to  have  been  cited  in  Locators 
v.  Clough,  17  Man.  L.R.  659,  nor  to  the  trial  Judge  in  this  case. 
It  was  referred  to  and  followed  in  Sager  v.  Sheffer,  2 O.W.N. 
671,  and  is  in  principle  and  authority  to  be  preferred  to  the 
decision  of  the  Manitoba  Court.  See  also  Stratton  v.  Vachon, 
44  S.C.R.  395. 

I think  the  appeal  should  be  allowed,  with  costs  here  and 
below. 


D.  C. 
1912 

Rice 

v. 

Galbraith. 

Latchford,  J. 


Sutherland,  J.,  concurred. 


Judgment  accordingly , 


48 


ONTARIO  LAW  REPORTS. 


D.  C. 
1912 

March  8 


[VOL.. 


[DIVISIONAL  COURT.] 

Rich  v.  Melancthon  Board  of  Health. 

Public  Health  Act — Services  of  Physician  Employed  by  Loca:l  Board  of 

Health — Remuneration — Action  for — Mandatory  Order  — Liability  — 

Proper  Remedy — Prerogative  Writ  of  Mandamus — Order  under  Con. 

Rule  1091 — Jurisdiction  of  County  Court — Reasons  for  Judgment — 

Costs. 

The  members  of  a Local  Board  of  Health  are  not,  under  the  Public  Health 
Act,  R.S.O.  1897,  ch.  248,  constituted  a corporation;  and  the  Board  as 
a whole  is  not  personally  liable  nor  are  the  members  individually 
liable  to  be  sued  for  the  recovery  of  a medical  claim  as  a private  debt. 
The  remedy  is  to  be  sought  against  the  Board  as  a public  body,  by  seek- 
ing the  grant  of  a writ  of  mandamus  requiring  the  Board  to  issue  an 
order  upon  the  municipality  for  the  amount  of  the  claim. 

Bibby  v.  Davis  (1902),  1 O.W.R.  189,  not  followed. 

Sellars  v.  Village  of  Dutton  (1904),  7 O.L.R.  646,  and  Ross  v.  Township 
of  London  (1910-11),  20  O.L.R.  578,  23  O.L.R.  74,  followed. 

The  writ  is  the  prerogative  writ  of  mandamus ; and  the  order  substituted 
therefor  may  now  be  issued  by  any  of  the  Divisions  of  the  High  Court, 
but  not  by  an  inferior  Court,  and  is  issued  upon  summary  application: 
Con.  Rule  1091. 

The  mandamus  which  may  be  awarded  in  an  action  is  either  in  the  nature 
of  the  old  equitable  mandatory  injunction,  or  is  merely  ancillary  to  the 
enforcement  of  a legal  right  for  which  an  action  may  be  maintained  at 
law. 

Judgment  of  the  County  Court  of  Dufferin  affirmed,  with  a variation  as 
to  costs. 

Per  Boyd,  C.: — Reasons  for  the  judgment  below  should  have  been  given. 

An  appeal  by  the  plaintiff  from  the  judgment  of  the  Judge  of 
the  County  Court  of  the  County  of  Dufferin,  dismissing  an  action 
brought  in  that  Court  by  a physician  to  recover  $30  for  services 
performed  under  the  direction  of  the  Board  of  Health  of  the 
Township  of  Melancthon.  The  plaintiff  sought  a personal 
judgment  and  a mandatory  order  to  enforce  it. 

March  5.  The  appeal  was  heard  by  a Divisional  Court  com- 
posed of  Boyd,  C.,  Latchford  and  Middleton,  JJ. 

W.  H.  Harris,  for  the  plaintiff,  argued  that  the  Board  of 
Health  had  been  properly  sued,  and  cited  Bibby  v.  Davis  (1902)  r 
1 O.W.R.  189,  and  Ross  v.  Township  of  London  (1910-11),  20 
O.L.R.  578,  23  O.L.R.  74.  The  plaintiff  was  the  duly  appointed 
medical  health  officer  of  the  Board.  He  did  work  on  the  direction 
of  the  Board,  and  should  be  paid  therefor:  Public  Health  Act, 
R.S.O.  1897,  ch.  248,  sec.  122. 

W.  C.  Chisholm,  K.C.,  for  the  defendants,  contended  that 
the  plaintiff  was  not  properly  authorised  by  the  Board  of  Health. 
The  plaintiff  should  have  notified  the  Board  before  undertaking 


XXVI.] 


ONTARIO  LAW  REPORTS. 


49 


to  do  the  work  himself.  Then  the  Board  could  have  compelled 
the  people  whose  house  was  cleaned  to  pay  for  the  disinfection 
thereof.  Besides,  the  plaintiff’s  remedy,  if  any,  was  by  appli- 
cation for  mandamus,  and  not  by  action.  He  referred  to  Ross 
v.  Township  of  London,  supra,  and  the  cases  there  cited. 

Harris,  in  reply. 

March  8.  Boyd,  C.: — This  is  an  unfortunate  bit  of  litigation 
for  the  plaintiff.  He  is  entitled  to  be  paid  $30  for  his  medical 
services,  rendered  at  the  instance  of  the  Board  of  Health,  but 
cannot  recover  it  by  this  method.  The  miscarriage  is  not  to  be 
wondered  at,  considering  the  state  of  the  cases  and  the  vague 
and  rather  embarrassing  clauses  of  the  Public  Health  Act — 
which  invite,  and  are,  I understand,  about  to  receive  clarifying 
amendments:  R.S.O.  1897,  ch.  248. 

It  is  now  pretty  well  settled  that  the  members  of  the  Board 
are  not  constituted  a corporation,  though  they  have  been  judi- 
cially spoken  of  as  a quasi-corporation;  and  it  is  also  settled  that 
the  Board  as  a whole  is  not  personally  liable  nor  are  the  component 
members  thereof  individually  liable  to  be  sued  for  the  recovery 
of  medical  claims  as  for  a private  debt.  The  remedy  is  to  be 
sought  against  the  Board  as  a public  body,  if  payment  cannot 
be  otherwise  obtained — by  seeking  the  grant  of  a writ  of  mandamus 
requiring  the  Board  to  issue  an  order  upon  the  municipality  for 
the  amount  of  the  claim,  in  order  that  payment  may  be  made 
out  of  the  funds  applicable  thereto. 

The  writ  is  the  high  prerogative  writ,  so-called,  available  in 
cases  where  there  is  no  right  of  action  for  the  recovery  of  the 
claim,  and  relief  is  to  be  sought  against  a public  body  who  fail 
to  perform  statutory  or  other  public  duties  imposed  upon  that 
body,  for  the  benefit  of  the  applicant.  This  plaintiff  by  his 
pleading  seeks  a personal  judgment  for  the  amount,  and  also 
asks  for  a mandatory  order  to  enforce  it,  and  for  that  purpose 
sues  the  public  body  under  the  name  of  the  Board  of  Health  for 
the  Township.  The  personal  judgment  he  cannot  get,  and  for 
this  reason  he  cannot  in  and  by  an  action  get  a mandatory  order. 
Nor  could  he,  in  any  circumstances,  get  the  mandatory  order  of  the 
character  required  from  an  inferior  Court,  such  as  the  County 
Court.  The  prerogative  writ  of  mandamus,  which  is  the  appropriate 

4 — XXVI.  O.L.R. 


D.  C. 
1912 

Rich 

v. 

Melanc- 

THON 

Board  of 
Health. 

Boyd,  C. 


50 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

Rich 

v. 

Melanc- 
thon 
Boabd  of 
Health. 

Boyd,  C. 


method  of  relief,  can  be  issued  only  by  the  High  Court.  Orig- 
inally confined  to  the  King’s  Bench  alone,  it  may  now  be  issued 
by  any  of  the  Divisions  of  the  High  Court,  as  was  explained  in 
the  case  reported  in  19  P.R.  329,  332,  Toronto  Public  Library 
Board  v.  City  of  Toronto  (1900). 

The  case  of  Bibby  v.  Davis,  1 O.W.R.  189,  which  may  have 
misled  the  plaintiff,  is  not  now  to  be  followed  in  the  light  of  later 
decisions:  Sellars  v.  Village  of  Dutton  (1904),  7 O.L.R.  646;  Ross 
v.  Township  of  London,  20  O.L.R.  578,  affirmed  in  appeal,  23 
O.L.R.  74.  See*  also,  as  to  the  writ,  City  of  Kingston  v.  Kingston, 
etc.,  Electric  R.W.  Co.  (1897),  28  O.R.  399,  and  in  appeal  (1898), 
25  A.R.  462. 

There  is  an  inherent  lack  of  jurisdiction  in  the  County  Court 
to  deal  with  this  claim;  but  the  matter  was  not  contested  on  the 
line  above  indicated  on  the  appeal  before  us.  We  are  all  in  the 
dark  as  to  what  took  place  on  the  trial  below;  the  only  judgment 
given  being  that  the  action  is  dismissed  with  costs.  This  curt 
disposal  of  appealable  cases  has  often  been  commented  upon  as 
unfair  to  the  suitors  and  to  the  Court  of  Appeal.  When  reasons 
are  given  for  the  judgment,  it  enables  the  dissatisfied  litigant  to 
judge  whether  to  appeal  or  not,  and  these  reasons  are  a 
material  assistance  to  the  appellate  Court.  In  brief,  when 
reasons  for  the  judgment  exist,  they  should  be  given;  when  they 
are  not  given,  it  may  be  that  the  rule  “de  non  apparentibus 
etc.,  will  excuse. 

The  defendants  raised  an  issue  disputing  the  claim  which  was 
vexatious  and  did  not  take  the  vital  point  on  which  we  decide; 
so  that,  while  the  appeal  is  disallowed,  we  think  the  proper  order 
to  make  is  to  dismiss  both  action  and  appeal  without  costs. 

This  is  to  be  without  prejudice  to  the  plaintiff  prosecuting 
his  claim  as  he  shall  be  advised — if  the  municipality  does  not 
provide  means  for  payment. 

Latchford,  J.: — I agree. 

Middleton,  J.: — I agree  with  my  Lord  the  Chancellor,  and 
only  desire  to  add  to  what  he  has  said,  for  the  purpose  of  ex- 
plaining more  at  length  the  reason  why  I think  that  an  action 
for  a mandamus  or  a mandatory  order  is  not  the  proper  or  permis- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


51 


sible  remedy.  Some  confusion  has  arisen  from  a failure  to  keep 
in  mind  the  historical  origin  of  the  present  jurisdiction  of  the  High 
Court,  and  by  reason  of  the  term  “mandamus”  being  used  to 
indicate  several  distinct  things. 

The  Court  of  Chancery  always  had  jurisdiction  to  enforce 
certain  rights  by  means  of  a mandatory  injunction,  as  well  as  by 
specific  performance.  Prior  to  the  Common  Law  Procedure 
Act,  the  Courts  of  Law  had  no  such  power. 

The  Court  of  King’s  Bench,  as  one  of  the  Crown  prerogatives, 
had  the  right  to  issue  the  prerogative  writ  of  mandamus.  The 
scope  of  this  writ  was  very  widely  different  from  the  mandatory 
order  in  Equity. 

The  Common  Law  Commissioners  of  1834  reported  in  favour 
of  an  amendment  by  which  the  Courts  of  Law  should  be  given  the 
same  jurisdiction  as  the  Court  of  Equity  to  restrain  the  violation 
of  legal  rights,  in  cases  in  which  an  injunction  might  issue  for 
that  purpose  from  Courts  of  Equity.  Following  this,  the  Common 
Law  Procedure  Act  of  1854  provided  that  a plaintiff  at  law 
might  claim  a writ  of  mandamus  “commanding  the  defendant 
to  fulfil  any  duty  in  the  fulfilment  of  which  the  plaintiff  is  person- 
ally interested.”  This  writ  was  to  have  the  same  force  and  effect 
as  the  peremptory  writ  issued  out  of  the  Queen’s  Bench.  This 
statute  was  subsequently  enacted  here,  and  in  its  present  form  is 
found  as  Con.  Rules  1081-1083. 

One  of  the  cardinal  principles  governing  the  issue  of  the 
prerogative  writ  was,  that  it  would  never  be  granted  where  the 
applicant  had  some  other  remedy  open  to  him.  After  the  passing 
of  the  Common  Law  Procedure  Act,  it  was  suggested  that  ^the 
power  conferred  upon  that  Court  to  award  a mandamus  in  an 
action  practically  superseded  and  rendered  obsolete  the  peremptory 
writ.  In  The  Queen  v.  Lambourn  Valley  R.W.  Co.  (1888),  22 
Q.B.D.  463,  it  was  said  by  Pollock,  B.,  that  “since  the  passing 
of  this  Act  it  cannot  be  said  that  the  plaintiff  has  no  specific 
remedy  to  enforce  the  right  which  he  says  has  been  denied  to  him;” 
and  by  Manisty,  J. : “In  1854,  a remedy  which  did  not  exist  before 
was  given  by  the  Legislature,  viz.,  an  action  of  mandamus, 
which  is  in  fact  for  a decree  ordering  the  performance  of  the  duty 
which  the  Court  thinks  ought  to  be  done,  and  is  a more  convenient 
proceeding  than  by  the  prerogative  writ.” 


D.  C. 
1912 

Rice 

V. 

Melanc- 

THON 

Board  of 
Health. 

Middleton,  J. 


52 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

Rich 

v. 

Melanc- 

THON 
Board  of 
Health. 

Middleton,  J. 


This  view  of  the  effect  of  the  statute  has  not  been  generally 
accepted;  and  in  Smith  v.  Chorley  District  Council,  [1897]  1 Q.B. 
532,  Kennedy,  J.,  collects  the  subsequent  decisions  in  which 
it  has  been  commented  upon,  and  adopts  as  a more  accurate 
statement  of  the  law  that  found  in  Baxter  v.  London  County  Council 
(1890),  63  L.T.R.  767,  at  p;  771,  where  Day,  J.,  says:  “The  true 
and  only  remedy  which  the  plaintiff  has  for  the  purpose  of  en- 
forcing the  rights  which  I am  of  opinion  he  has  got,  is  by  a pre- 
rogative writ  of  mandamus.  When  I objected  that  this  was  a 
matter  for  mandamus,  I was  answered  that  this  was  an  action 
for  a mandamus.  It  is  an  action  for  a mandamus  based  upon  the 
Common  Law  Procedure  Act,  1854,  and  the  action  for  a mandamus 
is  simply  an  attempt  to  engraft  upon  the  old  common  law  remedy 
a right  in  the  nature  of  specific  performance.  When  private 
persons  had  rights  one  against  the  other,  the  Court  had  power  to 
grant  a mandamus  or  direct  specific  performance,  or  something 
in  the  nature  of  an  injunction,  to  command  that  the  right  claimed 
by  the  one  party  should  be  acceded  to  by  the  other.  But  it  was 
never  contemplated  that  the  action  for  a mandamus  was  to  super- 
sede the  prerogative  writ  of  mandamus.  In  this  case  no  action 
will  lie.  I am  perfectly  clear  that  this  is  not  an  action  which  will 
lie  between  the  parties,  or  a case  in  which  a statutable  mandamus 
will  be  applicable,  because  no  action  would  lie,  and  a mandamus 
is  only  granted  as  ancillary  to  the  action,  and  for  the  purpose  of 
enforcing  the  private  right  in  respect  of  which  the  private  liti- 
gation had  arisen.  It  was  never  contemplated  that  a private 
mandamus  should  be  granted  in  cases  in  which  a prerogative 
mandamus  had,,  from  time  whereof  memory  does  not  run  to 
the  contrary,  been  alone  the  effective  remedy.” 

This  is  quite  in  accordance  with  the  view  taken  in  other  cases 
by  other  Judges.  In  Glossop  v.  Heston  and  Isleworth  Local  Board 
(1879),  12  Ch.D.  102,  at  p.  122,  Brett,  L.J.,  speaking  of  the  man- 
damus referred  to  in  the  section  of  the  Judicature  Act  corres- 
ponding with  the  Ontario  Judicature  Act,  R.S.O.  1897,  ch.  51, 
sec.  58,  sub-sec.  9 — which  provides  that  “a  mandamus  or  an 
injunction  may  be  granted  ...  in  all  cases  in  which  it  shall 
appear  to  the  Court  to  be  just  and  convenient” — says  that  the 
case  before  him  “is  not  brought  within  the  rule  that  would  enable 
the  Court  of  Chancery  to  grant  a mandatory  injunction.  It  is 


XXVI.] 


ONTARIO  LAW  REPORTS. 


53 


said  that,  nevertheless,  the  defendants  are  liable  to  a mandamus 
to  do  their  duty.  Now,  supposing  they  had  neglected  or  refused 
to  do  their  duty,  then  I think  they  would  have  been  liable  to  a 
mandamus,  but  not  to  a mandamus  to  be  granted  by  the  Chancery 
Division.  It  would  have  been  a prerogative  mandamus,  as  it 
is  called,  to  them  as  a public  body  to  enter  upon  and  do  their 
duty.  That,  as  it  seems  to  me,  under  the  Judicature  Act  as  it 
was  before,  is  a remedy  that  can  be  granted  only  in  the  Court  of 
Queen's  Bench.  I think  the  mandamus  spoken  of  in  the  . . . 

Judicature  Act  is  not  the  prerogative  mandamus,  but  only  a man- 
damus which  may  be  granted  to  direct  the  performance  of  some 
act,  of  something  to  be  done,  which  is  the  result  of  an  action 
where  an  action  will  lie.” 


D.  C. 
1912 

Rich 

v. 

Melanc- 

THON 

Board  of 
Health. 

Middleton,  J. 


In  the  c&se  already  quoted,  Kennedy,  J.,  deals  with  the  series 
of  cases  in  which  an  action  for  mandamus  had  been  successfully 
brought  against  public  bodies,  by  stating  that  they  are  all  cases 
where  there  was  a debt  and  “in  which  the  relief  by  mandamus 
might  properly  be  termed  ancillary  relief.” 

The  cases  in  our  own  Courts  dealing  with  the  right  of  a physi- 
cian employed  by  a Local  Board  of  Health,  shew  that  there  is 
no  debt.  The  situation  is  analogous  to  that  existing  in  The  King 
v.  Beeston  (1790),  3 T.R.  592,  where  a mandamus  was  issued 
against  the  churchwardens  and  overseers  directing  payment 
of  a sum  payable  out  of  certain  parish  funds,  upon  a contract 
which  the  parish  overseers  had  made  under  a statutory  power — 
the  churchwardens  not  being  “technically  a corporation;  but  as 
far  as  concerns  the  regulation  of  the  poor  of  the  parish  they 
stand  in  pari  rationed  Upon  the  same  principle,  it  is  said  in 
Mayor,  etc.,  of  Salford  v.  County  Council  of  Lancashire  (1890), 
25  Q.B.D.  384,  that  an  action  for  mandamus  would  not  lie,  because 
there  was  no  debt,  and  the  plaintiffs’ only  remedy  was  by  the  per- 
emptory writ  of  mandamus. 

Under  our  practice,  the  peremptory  writ  of  mandamus  having 
been  superseded  by  the  simple  procedure  of  Con.  Rule  1091, 
the  convenience  urged  in  some  of  the  English  cases  in  favour  of 
the  action  of  mandamus  disappears.  Apart  from  this,  the  great 
weight  of  modern  authority  is  in  favour  of  the  view  I have  indicated, 
that  the  mandamus  which  may  be  awarded  in  an  action  is  either 


54 


ONTARIO  LAW  REPORTS. 


D.  C. 
1912 

Rich 

v. 

Melanc- 

THON 

Board  of 
Health. 

Middleton,  J. 


[VOL. 


in  the  nature  of  the  old  equitable  mandatory  injunction,  or  is 
merely  ancillary  to  the  enforcement  of  a legal  right  for  which 
an  action  might  be  maintained  at  law. 

It  should  also  be  borne  in  mind  that  the  County  Court  has  no 
jurisdiction  to  grant  a peremptory  writ.  While  the  Con.  Rules 
govern  the  practice  and  procedure  in  County  Court  actions, 
they  do  not  confer  any  jurisdiction  upon  the  County  Court.  The 
jurisdiction  of  the  County  Court  must  be  sought  in  the  County 
Courts  Act;  and,  while  the  County  Court  has  jurisdiction  in 
actions  for  equitable  relief,  where  the  subject-matter  does  not 
exceed  $500,  and  while  it  has  “as  regards  all  causes  of  action 
within  its  jurisdiction  . . . power  to  grant  . . . such 
relief,  redress  or  remedy  . . .by  the  same  mode  of  pro- 
cedure, and  in  as  full  and  ample  a manner  as  might  and  ought 
to  be  done  in  the  like  case  before  the  High  Court/’*  it  has  not 
the  right  to  entertain  an  application  for  the  old  prerogative  writ, 
this  being  vested  in  the  High  Court  only. 

Action  and  appeal  dismissed  without  costs. 


*County  Courts  Act,  10  Edw.  VII.  ch.  30,  sec.  28. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


55 


[DIVISIONAL  COURT.] 

Wadsworth  v.  Canadian  Railway  Accident  Insurance  Co. 

Accident  Insurance — Death  Claim — Cause  of  Death — Construction  of  Poli- 
cies— ■“ Caused  by  the  Burning  of  a Building” — “ Injuries  Happening 
from  Fits” — Efficient  Cause — Quantum  of  Indemnity. 

W.,  who  was  insured  by  the  defendants  under  two  policies  of  accident  in- 
surance, entered  a wooden  building  at  night,  with  a lighted  lantern; 
while  there  he  had  a fit,  and  in  the  fit  dropped  or  knocked  over  the 
lantern;  the  lantern  exploded  or  was  broken,  the  oil  escaped  from  it, 
and  a flame  arose,  which  enveloped  the  deceased,  and  inflicted  injuries 
from  which  he  died: — - 

Held,  that  the  injuries  were  not  “caused  by  the  burning  of  a building,” 
within  the  meaning  of  a double  indemnity  clause  in  the  policies. 

And  held  (Latchford,  J.,  dissenting),  that  the  case  was  not  one  of  “in- 
juries happening  from  any  of  the  following  causes  . . .” — one  of 

the  causes  specified  being  “fits” — within  the  meaning  of  a clause  in  the 
policies  limiting  the  amount  payable  in  such  cases  to  one-tenth  of  the 
amount  of  the  single  indemnity.  The  fit  was  not  the  efficient  cause  of 
the  death.  The  injuries  “happened”  not  from  the  fit  but  from  the  fire. 
The  cause  of  an  efficient  cause  is  not  itself  an  efficient  cause  or  causa 
causans. 

Review  of  the  authorities. 

Judgment  of  Middleton,  J.,  varied. 

Appeal  by  the  plaintiff  from  the  judgment  of  Middleton, 
J.,  who  tried  the  action  without  a jury  at  Ottawa,  in  so  far  as 
the  judgment  was  against  the  plaintiff. 

The  action  was  brought  to  recover  the  amounts  due  under 
two  policies  of  accident  insurance  issued  by  the  defendants  to 
John  Allen  James  Wadsworth  in  favour  of  his  wife,  the  plaintiff. 

The  two  policies  were  in  the  same  form.  The  insurance 
was  stated  to  be  “ against  bodily  injuries  caused  solely  by  ex- 
ternal, violent,  and  accidental  means//  as  specified  in  a schedule, 
and  “ against  disability  from  sickness.”  The  principal  sum  of 
each  policy  was  stated  to  be,  in  the  first  year  $5,000,  with  5 per 
cent,  increase  annually  for  ten  years,  amounting  to  $7,500. 
Under  “ Schedule  of  Indemnities,”  it  was  stated  in  “Part  A” 
that,  “if  any  of  the  following  disabilities  shall  result  from  such 
injuries  alone,  within  ninety  days  from  the  date  of  accident,  the 
company  will  pay  in  lieu  of  any  other  indemnity  ...  for 
loss  of  life,  the  principal  sum.”  For  loss  of  both  hands,  loss  of 
entire  sight,  etc.,  the  principal  sum  was  also  payable.  “Part 
C,”  headed  “Double  Payments,”  stated:  “If  such  injuries  are 
sustained  while  riding  as  a passenger  ...  or  are  caused 
by  the  burning  of  a building  in  which  the  insured  is  therein  (sic) 


D.C. 

1912 

March  9. 


56 


ONTARIO  LAW  REPORTS. 


D.C. 

1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 


[vol. 

at  the  commencement  of  the  fire,  the  amount  to  be  paid  shall 
be  double  the  sum  specified  in  clause  under  which  the  same 
arises.”  “Part  G:  In  case  of  injuries  happening  from  any  of 
the  following  causes  . . . fits,  vertigo,  sleep-walking,  duel- 
ling . . . causing  . . . the  company  will  pay  one-tenth 

of  the  amount  payable  for  bodily  injuries  as  stated  in  Part  A. 

. ” “Part  H:  In  case  of  the  happening  of  injuries  men- 
tioned in  special  indemnity  clauses  D,  E,  F,  and  G,  claims  shall 
be  made  only  under  said  clauses,  and  the  amount  to  be  paid 
under  said  clauses  shall  be  the  full  limit  of  the  company’s  liability, 
and  such  claim  shall  not  be  entitled  to  double  benefit  as  provided 
in  Part  C.” 

The  policies  were  dated  respectively  the  24th  December,  1907, 
and  the  30th  July,  1909,  and  all  the  premiums  were  paid  by 
Wadsworth  until  his  death  on  the  24th,  October,  1910. 

The  plaintiff  alleged  that  the  case  came  within  “Part  C,” 
death  being  “caused  by  the  burning  of  a building  in  which  the 
insured  is  ...  at  the  commencement  of  the  fire,”  and 
claimed  $11,000  and  $10,500  under  the  policies  respectively. 
The  defendants  tendered  $1,075,  which  was  refused.  The  de- 
fendants took  the  position  that  “Part  G”  and  “Part  H”  applied, 
and  that  the  utmost  to  which  the  plaintiff  was  entitled  was  $550 
under  one  policy  and  $525  under  the  other. 

The  trial  Judge  found  that  the  death  of  the  assured  resulted 
from  a fit,  which  caused  the  upsetting  of  a lantern,  whereby  the 
building  in  which  the  assured  was  was  set  on  fire,  and  the 
assured  received  the  injuries  from  which  he  died;  and  the 
judgment  at  the  trial  in  favour  of  the  plaintiff  was,  therefore, 
limited  to  the  two  sums  of  $550  and  $525;  and  the  plaintiff 
appealed. 

November  1,  1911.  The  appeal  was  heard  by  a Divisional 
Court  composed  of  Falconbridge,  C.J.K.B.,  Riddell  and 
Latchford,  JJ. 

R.  V.  Sinclair,  K.C.,  and  H.  Aylen,  K.C.,  for  the  plaintiff, 
argued  that  the  evidence  did  not  justify  the  findings  of  the  learned 
trial  Judge,  that  the  death  of  the  deceased  was  caused  by  a fit, 
and  that  he  was  subject  to  the  form  of  epilepsy  known  as  petit 
mat.  The  latter  finding  was  based  on  the  evidence  of  a medical 
witness,  and  was  a mere  inference  from  a previous  attack,  which 


XXVI.] 


ONTARIO  LAW  REPORTS. 


57 


the  Judge  found  to  have  been  a faint.  Probably  the  deceased  D-  c- 
~ 1912 

became  unconscious  owing  to  his  weak  condition,  and  the  lantern  

exploded,  the  result  being  that  the  building  was  set  on  fire,  and  Wadsworth 
the  insured  suffered  the  injuries  which  were  the  cause  of  his  death.  Canadian 
Even  if  the  deceased  did  have  a fit,  that  was  not  the  efficient  Accidbot 
cause  of  his  death.  As  regards  the  double  liability  clause,  they  Insurance 
argued  that  the  injuries  were  “ caused  by  the  burning  of  a build- 
ing/’ within  the  meaning  of  the  policy,  and  that  it  was  not  neces- 
sary that  the  building  should  have  been  wholly  burned,  in  order 
to  sustain  the  plaintiff’s  claim.  The  following  cases  were  re- 
ferred to:  Lawrence  v.  Accidental  Insurance  Co.  (1881),  7 Q.B.D. 

216;  Winspear  v.  Accident  Insurance  Co.  (1880),  6 Q.B.D.  42; 

Wicks  v.  Dowell  & Co.  Limited , [1905]  2 K.B.  225;  Clover  Clayton 
& Co.  Limited  v.  Hughes,  [1910]  A.C.  242;  Canadian  Casualty 
and  Boiler  Insurance  Co.  v.  Boulter,  Canadian  Casualty  and  Boiler 
Insurance  Co.  v.  Hawthorne  (1907),  39  S.C.R.  558;  Mardorf  v. 

Accident  Insurance  Co.,  [1903]  1 K.B.  584;  In  re  Etherington 
and  Lancashire  and  Yorkshire  Accident  Insurance  Co.,  [1909] 

1 K.B.  591;  Reynolds  v.  Accidental  Insurance  Co.  (1870),  22 
L.T.N.S.  820;  Houlihan  v.  Preferred  Accident  Insurance  Co.  of 
New  York  (1908),  145  N.Y.  St.  Repr.  1048;  Manufacturers’  Acci- 
dent Indemnity  Co.  v.  Dorgan  (1893),  58  Fed.  Repr.  945,  especially 
at  pp.  954,  955,  where  the  English  cases  are  considered. 

I.  F.  Hellmuth,  K.C.,  and  J.  G.  Gibson,  for  the  defendants, 
argued  that,  as  to  the  question  of  fact,  the  finding  of  the  learned 
trial  Judge  that  the  injuries  sustained  by  the  insured,  causing 
his  death,  happened  from  “fits,”  within  the  meaning  of  the  policy, 
was  fully  warranted  by  the  evidence,  and  should  not  be  dis- 
turbed. As  regards  the  construction  of  the  policy,  it  was  sub- 
mitted that  “Part  G”  was  not  a clause  exempting  the  defendants 
from  liability  in  certain  cases,  but  was  one  of  several  clauses 
fixing  their  liability  at  different  sums  according  to  the  different 
risks,  so  the  cases  cited  by  the  appellant,  all  of  which  deal  with 
exceptions  or  exemptions  from  liability,  had  no  application  to 
the  case  at  bar. 

Sinclair,  in  reply. 

March  9,  1912.  Falconbridge,  C.J.:— After  long  and  careful 
consideration,  in  the  course  of  which  I have  many  times  perused 
the  numerous  authorities  cited  (citations  from  which  appear  in 


58 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Falconbridge, 

C.J. 


my  brother  Riddell’s  judgment),  I have  come  to  the  conclusion 
(with  great  respect  and  after  much  hesitation)  that  I do  not 
agree  with  the  judgment  appealed  from,  and  think  that  it  ought 
to  be  reversed. 

“Part  G”  of  the  policy  which  has  to  be  construed  is  as  follows: 
“In  case  of  injuries  happening  from  any  of  the  following  causes, 
viz.,  intentional  injuries  inflicted  by  the  insured  or  any  other 
person  (other  than  burglars  or  robbers)  fits  . . sleep- 
walking . . . causing  death,  loss  of  sight  or  limb  . ..  . the 

company  will  pay  one-tenth  of  the  amount  payable  . . . ” 

It  is  by  no  means  easy  to  construe;  and,  as  my  brother  Middle- 
ton  says,  in  none  of  the  cases  is  there  any  attempt  to  construe 
such  a clause. 


I do  not  know  whether  there  is  any  light  shed  on  the  subject 
by  consulting  the  dictionaries  as  to  the  meaning  of  the  verb  “to 
happen”  (same  root  as  “capio”).  The  Imperial  defines  it:  “1. 
To  come  by  chance;  to  come  without  one’s  previous  expectation; 
to  fall  out.  . . . 2.  To  come;  to  befall.”  Murray  (Oxford 

Dictionary)  says:  “To  come  to  pass  (originally  by  ‘hap’  or 
chance);  to  take  place;  to  occur,  betide,  befall.  The  most 
general  verb  to  express  the  simple  occurrence  of  an  event,  often 
with  little  or  no  implication  of  chance  or  absence  of  design.” 
While  the  clause  does  not  aim  to  destroy  absolutely  the 
liability  of  the  company,  yet  its  language  is  intended  to  limit 
that  liability  to  a fractional  amount  of  the  sum  payable  under 
other  circumstances,  and  so  it  ought  to  be  construed  strongly 
against  the  company.  The  insurer  accepts  the  policy  with  the 
view  and  for  the  purpose  of  covering  all  accidents  which  may 
(“happen”  to  him.  In  In  re  Etherington  and  Lancashire  and 
Yorkshire  Accident  Insurance  Co.,  [1909]  1 K.B.  591,  Vaughan 
Williams,  L.J.,  says,  at  p.  596:  “I  start  with  the  consideration 
that  it  has  been  established  by  the  authorities  that  in  dealing 
with  the  construction  of  policies,  whether  they  be  life,  or  fire, 
or  marine  policies,  an  ambiguous  clause  must  be  construed  against 
rather  than  in  favour  of  the  company.”  Farwell,  L.J.,  at  p. 
600,  expresses  the  same  view. 

The  cases  of  Winspear  v.  Accident  Insurance  Co.,  6 Q.B.D. 
42,  and  Lawrence  v.  Accidental  Insurance  Co.,  7 Q.B.D.  216 
followed  in  the  United  States  in  Manufacturers’  Accident  In- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


59 


demnity  Co.  v.  Dorgan,  58  Fed.  Repr.  945,  would  be  absolutely 
in  point  if  in  the  Lawrence  case  the  fit  had  started  the  train  which 
passed  over  the  deceased,  and  in  the  Winspear  case  the  fit  had 
set  loose  the  flow  of  water  which  drowned  the  insured.  But, 
on  a consideration  of  the  numerous  cases  on  the  subject  of  proxi- 
mate cause  and  causa  sine  qud  non — e.g.,  the  illustration  that 
the  birth  of  the  insured  was  a cause  of  the  accident,  inasmuch 
if  he  had  never  been  born  the  accident  could  not  have  happened — 
I have  arrived  at  the  conclusion  that,  notwithstanding  the  finding 
of  the  trial  Judge,  which  we  are  bound  to  accept,  that  it  was 
the  fit  that  caused  the  upsetting  of  the  lantern  and  the  subse- 
quent fire,  the  injuries  “ happened”  not  from  the  fit  but  from 
the  fire. 

Therefore,  I agree  with  my  brother  Riddell  in  thinking  that 
the  appeal  should  be  allowed  in  part,  and  judgment  entered  for 
the  plaintiff  for  $10,750  ana  interest  from  the  teste  of  the  writ; 
the  plaintiff  to  have  costs  of  the  trial;  no  costs  of  appeal  to  either 
party. 

Riddell,  J.: — This  is  an  appeal  from  the  judgment  at  the 
trial  by  Mr.  Justice  Middleton,  without  a jury,  at  Ottawa,  June, 
1911.  John  Allen  James  Waasworth,  a man  of  some  means, 
living  in  Ottawa,  procured  from  the  defendants  two  policies  of 
accident  insurance  of  date  the  24th  December,  1907,  and  the 
30th  July,  1909,  respectively,  in  favour  of  his  wife,  the  plaintiff. 
The  material  part  of  the  policies — they  are  in  the  same  form — 
is  here  subjoined: — 

“The  Canadian  Railway  Accident  Insurance  Company, 
Ottawa,  Can.,  in  consideration  of  the  statements,  agreements 

. in  the  application  and  of  the  annual  premium  of 

payable does  hereby  insure 

John  Allen  James  Wadsworth  . . . against  bodily  injuries 

caused  solely  by  external,  violent  and  accidental  means,  as  speci- 
fied in  the  following  schedule  (subject,  however,  to  the  terms  and 
conditions  hereinafter  contained),  and  against  disability  from 
sickness,  as  follows: — 

“This  policy  may  be  renewed  from  year  to  year  upon  pay- 
ment of  the  annual  premium,  payable  as  aforesaid  in  each  year 
during  the  continuance  in  force  thereof,  and  the  payment  of 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Falconbridge, 

C.J. 


60 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell,  J. 


each  consecutive  full  year’s  renewal  premium  of  this  policy  shall 
add  five  per  cent,  to  the  principal  sum  of  the  first  year  until 
such  additions  shall  amount  to  fifty  per  cent.,  and  thenceforth 
so  long  as  this  policy  is  maintained  in  force  the  insurance  shall 
be  for  the  original  sum  plus  the  accumulation  of  fifty  per  cent., 
as  aforesaid. 

“The  principal  sum  of  this  policy  in  the  first  year  is  $5,000; 
with  five  per  cent,  increase  annually  for  ten  years  will  amount 
to  $7,500. 

“SCHEDULE  OF  INDEMNITIES. 

“Part  A. — If  any  of  the  following  disabilities  shall  result  from 
such  injuries  alone,  within  ninety  days  from  the  date  of  accident, 
the  company  will  pay  in  lieu  of  any  other  indemnity: 

In  One  Payment 

For  Loss  of  Life the  principal  sum 

For  Loss  of  Both  Hands  by  severance  at  or 

above  the  wrist the  principal  sum 

For  Loss  of  Both  Feet  by  severance  at  or 

above  the  ankle the  principal  sum 

For  Loss  of  One  Hand  at  or  above  the 
wrist,  and  One  Foot  at  or  above  the 

ankle the  principal  sum 

For  Loss  of  Entire  Sight  of  Both  Eyes,  if 

irrecoverably  lost the  principal  sum 

For  Loss  of  Either  Hand  by  severance  at  or 

above  the  wrist of  “ “ 

For  Loss  of  Either  Foot  by  severance  at  or 

above  the  ankle of  “ “ 

For  Loss  of  Entire  Sight  of  One  Eye,  if 

irrecoverably  lost 1/3  of  “ “ 

“The  payment  of  one  principal  sum  in  any  case  shall  end  this 

policy. 


“DOUBLE  PAYMENTS. 

“Part  C. — If  such  injuries  are  sustained  while  riding  as  a 
passenger  in  any  passenger  steamship  or  steamboat,  or  in  any 
steam,  cable  or  electric  passenger  railway  conveyance,  or  in  a 


XXVI.] 


ONTARIO  LAW  REPORTS. 


61 


passenger  elevator,  or  are  caused  by  the  burning  of  a building  in 
which  the  insured  is  therein  at  the  commencement  of  the  fire , the 
amount  to  be  paid  shall  be  double  the  sum  specified  in  clause 
under  which  the  claim  arises. 

“Part  G. — In  case  of  injuries  happening  from  any  of  the  follow- 
ing causes,  viz.,  intentional  injuries  inflicted  by  the  insured  or 
any  other  person  (other  than  burglars  or  robbers),  fits,  vertigo, 
sleep-walking,  duelling,  war  or  riot,  exposure  to  unnecessary 
danger,  engaging  in  bicycle,  automobile  or  horse  racing,  or  while 
under  the  influence  of  intoxicating  liquors  or  narcotics,  causing 
death,  loss  of  sight  or  limb  as  stated  in  Part  A,  the  company  will 
pay  One-Tenth  of  the  amount  payable  for  bodily  injuries  as  stated 
in  Part  A,  under  which  claim  arises;  or,  if  such  injuries  result 
in  total  or  partial  disability  as  provided  in  Part  B,  the  company 
will  pay  One-Tenth  of  the  amount  payable  for  weekly  indemnity 
as  stated  in  said  Part  B,  under  which  claim  arises. 

“Part  H. — In  case  of  the  happening  of  injuries  mentioned 
in  special  indemnity  clauses  D,  E,  F and  G,  claims  shall  be  made 
only  under  said  clauses,  and  the  amount. to  be  paid  under  said 
clauses  shall  be  the  full  limit  of  the  company’s  liability,  and  such 
claim  will  not  be  entitled  to  double  benefit  as  provided  in  Part  C.” 
(The  italics  are  mine). 

Wadsworth  paid  all  premiums  due  until  his  death  on  the 
24th  October,  1910,  under  circumstances  which  will  be  set  out 
later  in  this  judgment.  The  widow  claimed  that  the  case  came 
within  Part  C,  as  being  “caused  by  the  burning  of  a building 
in  which  the  insured  is  therein  (sic)  at  the  commencement  of  the 
fire,”  and  claimed  $11,000  and  $10,500  under  the  policies  respec- 
tively; the  company  tendered  $1,075,  which  was  refused.  The 
position  taken  by  the  company  was,  that  Parts  G and  H applied, 
and  that  the  whole  amount  (if  anything)  to  which  the  plaintiff 
was  entitled  was  $550  under  the  one  policy  and  $525  under  the 
other. 

On  action  brought,  the  defendants  pleaded  that  Wadsworth 
had  in  the  application  represented  that  he  had  never  had  and 
was  not  subject  to  fits,  or  disorder  of  the  brain,  or  any  bodily 
or  mental  infirmity,  which  the  company  alleged  was  untrue,  as 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell,  J. 


62  ONTARIO  LAW  REPORTS.  [vol. 

he  had  had  and  was  subject  to  fits  or  vertigo;  and  these  mis- 
statements were  material. 

At  the  trial,  it  was  decided,  on  satisfactory  evidence,  that 
the  only  instance  of  illness  or  anything  which  could  be  considered 
as  coming  under  the  description  did  not  take  place  till  long  after 
Insurance  the  issue  of  the  policies;  and  there  is  nothing  to  indicate  that 

vO. 

there  was  any  misrepresentation.  The  other  defence  the  learned 

Ridden,  j.  trial  Judge  gave  effect  to;  and  this  forms  the  subject  of  the 
present  appeal. 

The  facts  surrounding  the  death  of  the  insured  are  not  com- 
plicated. In  October,  1910,  the  insured  went,  with  other  mem- 
bers of  a hunting  club,  to  their  club-house  in  the  township  of 
Hincks.  On  the  23rd  October,  some  of  the  members  of  the  club 
were  out  all  day  hunting;  and,  when  they  came  in  comparatively 
late  and  after  * supper-time,  Wadsworth,  who  does  not  seem  to 
have  been  out  that  day  in  the  afternoon,  said  he  was  not  feeling 
well  and  did  not  feel  like  eating — he  did  not  have  any  supper 
and  went  and  lay  down  upstairs.  About  8.20  or  8.30  he  came 
downstairs,  declined  an  offer  of  something  to  eat,  and  asked  the 
chore  boy  to  open  a bottle  which  he  had.  This  the  boy  did; 
and  the  deceased,  dissolving  a tablet  in  some  fluid  out  of  this 
bottle,  drank  the  solution.  He  then  left  the  room  and  went 
outside.  A dog  was  heard  barking  shortly  after;  and,  when 
the  boy  went  out  to  investigate,  he  noticed  the  water-closet  on 
fire.  The  alarm  was  raised,  and  a number  of  persons  ran  to 
the  burning  building  with  water;  after  the  fire  was  extinguished 
at  least  in  part,  the  deceased  was  found  sitting  at  one  end  of 
the  building  and  on  the  opening  of  the  seat  of  the  closet,  or 
perhaps  the  boards  of  the  seat,  leaning  back  against  the  well, 
his  trousers  not  lowered.  He  was  taken  out  moaning,  apparently 
in  pain,  carried  limp  as  he  was  to  the  club-house  and  put  on 
a table.  He  was  found  to  be  rather  badly  burnt  about  the  feet, 
up  the  back  of  the  buttocks,  and  around  the  face  and  head; 
also  a patch  on  the  chest  and  on  the  shoulders. 

He  received  treatment  from  a medical  man  who  was  one  of 
his  club-mates,  and  was  shortly  thereafter  removed  to  Ottawa 
and  placed  in  the  Carleton  General  Hospital,  where  he  died  the 
next  day,  of  shock. 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 


XXVI.] 


ONTARIO  LAW  REPORTS. 


63 


The  closet  was  a small  building,  some  4^  or  5 feet  long  and 
about  as  much  in  depth,  with  no  front  but  with  wooden  sides  and 
back,  and  with  two  holes  in  the  seat. 

Next  day,  the  boy  found  in  the  bottom  ( i.e .,  as  we  are  inform- 
ed, the  pit)  the  side  of  an  ordinary  stable  lantern,  such  as  was  in 
use  at  the  club  for  going  out  with;  and,  while  Wadsworth  had 
not  taken  a lantern  out  with  him,  so  far  as  the  witness  could 
say,  there  was  one  noticed  missing  next  day.  It  seems  fairly 
clear  that  Wadsworth  took  the  lantern  with  him  to  light  him 
to  the  closet,  it  being  quite  dark  when  he  went  out,  and  it  being 
usual  to  take  a lantern  on  such  occasions. 

The  building  was  not  burnt,  not  even  badly  scorched,  and 
there  was  no  smell  of  oil  on  the  day  after  the  accident,  when 
Labelle  found  the  lantern;  no  considerable  part  of  the  lantern 
seems  to  have  been  found  except  the  “side”  which  was  found  in 
the  pit — the  globe  was  not  found,  but  one  witness  saw,  on  the 
night  of  the  casualty,  broken  glass,  the  shape  of  a globe,  lying 
on  the  platform  or  floor  of  the  closet  opposite  one  of  the  seats. 
We  are  told  that  this  was  at  the  opposite  end  of  the  closet  from 
where  Wadsworth  was  found,  but  I do  not  find  this  made  clear 
upon  the  evidence,  and  I cannot  say  that  it  is  material  one  way 
or  the  other. 

In  July  of  the  same  year,  Wadsworth,  at  the  same  club- 
house, after  dinner,  “seemed  to  faint  away;”  it  was  very  warm, 
but  he  did  not  seem  to  be  suffering  from  the  effects  of  the  heat. 

The  medical  man  who  attended  him  at  the  club  gave  a cer- 
tificate on  the  29th  October,  saying,  amongst  other  things:  “I 
can  only  account  for  his  getting  burned  by  believing  that  he 
must  have  taken  a fit  or  fainted  and  in  so  doing  upset  the  lantern, 
thus  setting  himself  on  fire.  Everything  in  connection  with  the 
burning  seems  to  indicate  this.” 

From  the  evidence  of  this  medical  man  and  another  called  at 
the  trial,  my  brother  Middleton  came  to  the  conclusion  that  the 
unfortunate  man  “took  a fit  when  he  ‘was  in  the  closet,  and 
that,  while  in  that  fit,  he  either  dropped  or  knocked  over  the 
lantern,  the  lantern  exploded  or  was  spilled  or  was  broken  by 
the  fall,  the  result  was  that  the  oil  escaped,  and  there  was  almost 
immediately  a very  extensive  flame,  which  enveloped  him  and 
inflicted  the  very  severe  injuries  from  which  he  died.”  And 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell,  J. 


64 


ONTARIO  LAW  REPORTS.  [vol. 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell,  J. 


the  deceased  was  affected  with  a “malady  . . . known 

as  minor  epilepsy  or  petit  mat” 

I think  my  learned  brother’s  conclusion  amply  sustained  by 
the  evidence;  and  I have  arrived  at  the  same  conclusion  from 
an  independent  consideration  of  the  facts  as  proved. 

It  seems  to  me  also  clear  that  the  injuries  were  not  “caused 
by  the  burning  of  a building”  at  all. 

What  is  said  about  the  building  is,  indeed,  that  it  was  on 
fire,  not  very  badly  scorched;  the  cook  told  others  of  the  fire; 
that  the  closet  was  on  fire;  but,  as  one  of  the  witnesses  threw 
a pail  of  water  upon  the  roof,  it  may  perhaps  be  inferred  that 
the  building  did  burn — that  it  was  a “burning  building”  within 
the  meaning  of  the  policy — as  in  law  ( Regina  v.  Parker  (1839), 
9 C.  & P.  45,  per  Parke,  B.),  it  is  sufficient  that  it  be  scorched 
and  charred  in  a trifling  way. 

But  the  condition  of  Part  C is  not  that  the  injuries  be  sus- 
tained while  in  a burning  building;  the  language  is  not  the  same 
as  in  the  former  part  of  Part  C,”  “sustained  while  riding  . . . 

in  any  ....  steamboat  . . . railway  conveyance 

.” — the  words  are  not  “sustained  while  in  a burning 
building,”  but  “caused  by  the  burning  of  a building.”  We  are 
referred  to  Houlihan  v.  Preferred  Accident  Insurance  Co.  of  New 
York,  145  N.Y.  St.  Repr.  1048,  as  deciding  that  the  two  expres- 
sions are  synonymous.  In  that  case  the  leading  judgment  by 
Clarke,  J.  (in  which  all  but  one  of  the  other  Judges  concurred, 
and  he  agreed  in  the  result),  says  (p.  1050):  “It  must  be  that 
what  was  attempted  to  be  guarded  against  was  injury  in  the 
insured  resulting  from  fire  while  in  a building.”  In  this  con- 
clusion I am  unable  to  agree — the  words  “caused  by  the  burning 
of  a building”  have  a clear  and  unambiguous  meaning,  and  a 
meaning  distinctly  differing  from  that  of  the  words  employed 
by  the  learned  New  York  Judge.  Nor,  in  my  view,  does  the 
case  of  Northrup  v.  Railway  Passenger  Assurance  Co.  (1871), 
43  N.Y.  516,  cited  as  supporting  the  conclusion,  assist,  even  if 
it  be  well  decided — that  being  simply  a decision  that,  where  a 
passenger  had  to  walk  from  a railway  station  to  a steamboat 
landing,  70  rods  distant,  she  did  not  cease  to  be  “travelling 
by  . public  conveyance  provided  for  the  transportation 

of  passengers.” 


XXVI.] 


ONTARIO  LAW  REPORTS. 


65 


But,  if  we  were  to  give  full  authoritative  weight  to  the  Houlihan 
case,  I do  not  think  that,  even  then,  the  plaintiff  would  have 
made  out  her  case.  There  the  bedclothes  and  mattresses  of  the 
bed  upon  which  the  deceased  slept  were  burned,  her  night  clothes 
were  burned  from  her  and  other  circumstances  shewed  that  it 
was  the  burning  of  permanent  or  quasi-permanent  furnishing 
and  contents  df  the  room  which  set  fire  to  her — it  was  not,  a$ 
in  this  case,  the  blazing  up  and  burning  of  oil  brought  by  the 
deceased  into  the  room  for  a purely  temporary  purpose.  What- 
ever may  be  the  law  in  the  case  of  the  burning  being  caused  by 
the  ignition  of  permanent  or  quasi-permanent  contents  of  a room, 
I venture  to  think  that  no  stretch  of  language  can  reasonably 
make  injuries  caused  by  the  burning  of  oil  which  is  brought  into 
the  room  by  the  insured  for  a temporary  personal  purpose  only 
come  within  the  meaning  of  the  words  “ caused  by  the  burning 
of  a building.” 

This  claim  of  the  plaintiff  is,  in  my  view,  not  well  founded. 

Then,  as  to  the  application  of  Parts  G and  H.  The  meaning 
of  G,  so  far  as  affects  the  present  case,  is:  “In  case  of  injuries 
which  happen  from  fits  or  vertigo,  and  which  injuries  cause 
death,  the  company  will  pay  one-tenth  of  the  amount  stated  in 
Part  A” — the  participle  “causing,”  in  the  third  line,  being  in  the 
same  grammatical  relation  as  the  participle  “happening”  in  the 
first  line.  The  clause  does  not  mean,  “In  case  of  injuries  which 
happen  from  fits  or  vertigo,  which  fits  or  vertigo  cause  or  causes 
death,”  etc.,  etc. 

The  only  question  then  is,  whether  the  injuries  happened 
from  fits  or  vertigo,  because  they  undoubtedly  did  cause  death. 

In  considering  this  question,  we  must  look  at  the  case  from 
a common  sense,  business  point  of  view,  avoiding  metaphysical 
subtlety;  ever  having  in  mind  that  such  agreements,  being  in 
the  language  selected  by  the  company,  should,  where  there  is 
a real  ambiguity,  be  construed  most  strongly  against  the  company, 
we  are  not,  by  too  refined  or  unnatural  an  interpretation  of  the 
language  employed,  to  conjure  up  an  ambiguity  where  none 
really  exists. 

“It  is  only  a fair  rule  . . . which  Courts  have  adopted 

to  resolve  any  doubt  or  ambiguity  in  favour  of  the  insured  and 
against  the  insurer:”  Manufacturers’  Accident  Indemnity  Co.  v. 

5 — XXVI.  O.L.E. 


D.  C. 

19]  2 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell,  J. 


66 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell,  J. 


Dorgan,  58  Fed.  Itepr.  945,  at  p.  956,  per  Taft,  J.  (now  President 
Taft) ; but  it  would  Pot  be  a fair  rule  to  invent  or  imagine  doubt 
or  ambiguity  where  none  can  be  found. 

In  view  of  the  law  as  laid  down  by  the  decisions,  I do  not 
think,  however,  that  there  can  be  said  to  be  any  ambiguity  or 
doubt. 

The  injuries  which  caused  the  death  are  the  burns — did  these 
happen  from  fits  or  vertigo? 


I do  not  lay  any  stress  whatever  on  the  use  of  the  plural 
“fits” — nor  do  I think  that  if  the  cause  were  an  epileptic  fit, 
the  plaintiff  could  recover  because  the  plural  is  used  in  the  policy 
instead  of  the  singular.  “Fits”  is  colloquially  the  same  as  “fit:” 
cf.  Murray,  New  English  Diet.,  sub  voc.  “Fit,”  pp.  262  ad  fin., 
263  ad.  init.  c,  d.  Also  in  the  English  cases  of  epilepsy,  which 
will  be  cited,  the  words  “fits”  is  used  in  the  policy,  but  the  in- 
sured had  only  the  one  fit — indeed,  in  case  at  least  of  death,  it 
would  scarcely  appear  that  more  than  one  fit  was  to  be  con- 
sidered; The  burns  were  caused  primarily  and  immediately  by 
the  fire — the  fire  was  the  proximate  cause.  In  philosophy  it  is 
said  “ causa  causae  causantis , causa  causans  ipsa ” — and  if,  in 
law,  the  cause  of  the  proximate  cause  were  itself  an  efficient 
cause,  there  would  be  no  difficulty  in  the  present  case.  No 
doubt,  the  fire  was  caused  by  the  fits  and  vertigo.  Does  that 
make  these  an  efficient  cause? 


Two  recent  cases  in  England  are  strongly  pressed  upon  us. 
In  W inspear  v.  Accident  Insurance  Co.,  6 Q.B.D.  42,  the  policy 
did  not  extend  to  “any  injury  caused  by  or  arising  from  natural 
disease  or  weakness  or  exhaustion  consequent  upon  disease.” 
W.,  being  the  insured,  was  overtaken  by  an  epileptic  fit  when 
fording  a shallow  stream;  he  fell  down  in  the  stream  and  was 
drowned.  It  was  argued  that  “it  was  the  fit  which  caused  the 
drowning,  for  even  after  the  insured  had  fallen  into  the  stream 
he  could  have  got  his  head  out  of  the  water  but  for  the  fit.”  The 
Court  of  Appeal  (Lord  Coleridge,  C.J.,  Baggallay  and  Brett, 
L.JJ.),  however,  held  that  the  insurance  company  was  liable, 
and  that  the  death  was  not  caused  by  any  natural  disease  or 
weakness,  but  by  the  accident  of  drowning — that  “those  words 
in  the  proviso  . . . point  to  an  injury  caused  by  natural 

disease,  as  if,  for  instance,  in  the  present  case,  epilepsis  had 


XXVI.  ] 


ONTARIO  LAW  REPORTS. 


67 


really  been  the  cause  of  death.”  There  are  two  points  of  dis- 
tinction between  the  Winspear  case  and  ours:  (1)  there  the 

cause  of  death  was  being  considered;  in  ours,  the  cause  of  the 
happening  of  injuries;  (2)  there  the  epilepsy  was  not  the  cause 
of  the  presence  of  the  water  which  drowned;  here,  the  epilepsy 
was  in  a sense  the  cause  of  the  fire  which  burned. 

The  Winspear  case  is  referred  to  and  followed  in  an  American 
case,  Manufacturers’  Accident  Indemnity  Co.  v.  Dorgan,  58  Fed. 
Repr.  945,  in  which  an  elaborate  and  careful  judgment  is  given 
by  the  present  President  of  the  United  States,  then  Mr.  Justice 
Taft.  The  deceased  had  been  “ overtaken  by  some  temporary 
trouble,  ’ ’ which  caused  him  to  fall  into  a brook,  upon  whose 
banks  he  was  at  the  time;  he  was  drowned.  The  insurance 
company  was  held  liable,  although  the  policy  provided  that  they 
should  not  be  liable  for  “ accidental  injuries  or  death  resulting 
from  or  caused,  directly  or  indirectly,  wholly  or  in  part,  by  or 
in  consequence  of  fits,  vertigo,”  etc.,  etc.,  “nor  to  any  cause 
excepting  where  the  injury  is  the  sole  cause  of  the  disability 
or  death.”  This  case  goes  no  further  than  the  Winspear  case. 

The  other  English  case  most  strongly  relied  upon  is  Lawrence 
v.  Accidental  Insurance  Co.,  7 Q.B.D.  216.  The  policy  did  not 
insure  in  case  of  death  arising  from  fits.  The  insured,  standing 
at  a railway  station,  was  seized  by  a fit  and  fell  forward  off  the 
platform  when  a train  was  passing— this  went  over  his  body  and 
killed  him.  It  was  argued  for  the  company  that  “the  accident 
actually  arose  from  the  disease”  (p.  218),  but  the  Court,  Den- 
man, J.,  held  them  liable.  He  says  (p.  219):  “Now,  the  imme- 
diate cause  of  death  is  not  in  the  least  disputable,  but  there  is 
no  doubt  that  if  he  had  not  fallen  there  in  consequence  of  the 
fit  he  would  not  have  suffered  death,  and  in  that  sense  the  fit 
led  to  his  death.  The  question  is  whether  that  was  merely  one 
of  several  events  which  brought  about  the  accident,  in  the  sense 
that  it  caused  the  accident  to  happen  by  causing  him  to  be  there, 
or  whether  it  was,  within  the  meaning  of  this  proviso,  a cause 
of  death  which  would  prevent  the  policy  applying  to  the  case.” 
In  other  words,  was  the  fit  a causa  causans  or  a mere  causa  sine 
qua  (so-called)  or  condition?  Watkin  Williams,  J.,  agreed. 
Quoting  Lord  Bacon’s  Maxims  of  the  Law,  Reg.  1— “It  were 
infinite  for  the  law  to  consider  the  causes  of  causes,  and  their 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell,  J. 


68 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell,  J. 


impulsions  one  of  another;  therefore  it  contenteth  itself  with 
the  immediate  cause” — he  says:  “According  to  the  true  principle 
of  law,  we  must  look  at  only  the  immediate  and  proximate  cause 
of  death,  and  it  seems  to  me  to  be  impracticable  to  go  back  to 
cause  upon  cause,  which  would  lead  us  back  ultimately  to  the 
birth  of  the  person,  for  if  he  had  never  been  bom  the  accident 
would  not  have  happened.  The  true  meaning  of  this  proviso 
is  that  if  the  death  arose  from  a fit,  then  the  company  are  not 
liable,  even  though  accidental  injury  contributed  to  the  death 
in  the  sense  that  they  were  both  causes.  . . .It  is  essential 

to  that  construction  that  it  should  be  made  out  that  the  fit  was 
a cause  in  the  sense  of  being  the  proximate  and  immediate  cause 
of  the  death,  before  the  company  are  exonerated,  and  it  is  not 
the  less  so,  because  you  can  shew  that  another  cause  intervened 
and  assisted  in  the  causation.” 


The  same  remarks  apply  to  this  as  to  the  case  in  6 Q.B.D. — 
the  fit  did  not  cause  the  train  to  come  along — it  was  not  the  cause 
itself  of  the  causa  proximo. 

To  the  same  effect  are  the  remarks  of  Collins,  M.R.,  in  Wicks 
v.  Dowell  & Co.,  [1905]  2 K.B.  225,  at  p.  228,  which  case  does 
not  assist — nor  am  I able  to  derive  any  assistance  from  Mar  dor f 
v.  Accident  Insurance  Co.,  [1903]  1 K.B.  584. 

If,  in  the  case  in  6 Q.B.D.,  the  falling  of  the  insured  had  let 
in  the  water  which  drowned  him — or,  in  the  case  in  7 Q.B.D., 
the  falling  had  automatically  brought  on  the  engine,  the  cases 
would  be  parallel  with  the  present — but  that  is  not  the  case; 
and,  as  a consequence,  these  cases  are  not  conclusive. 

But  there  are  cases  in  which  the  proximate  cause  is  not  accom- 
panied by  another  cause  ( causa  sine  qua  non),  but  has  been 
actually  caused  itself  by  another  cause,  and  it  has  been  held 
that  this  last-named  cause  is  not  to  be  considered  as  the  causa 
causans — to  use  Lord  Bacon’s  terminology,  we  are  not  to  look 
to  the  causes  of  causes. 

In  Busk  v.  Royal  Exchange  Assurance  Co.  (1818),  2 B.  & Aid. 
73,  the  servants  of  the  assured  negligently  lighted  a fire  in  the 
insured  ship,  whereby  she  was  burned.  The  case  was  elaborately 
argued  by  Campbell  and  Bosanquet.  Bayley,  J.,  says,  giving 
the  judgment  of  the  Court  (p.  80):  “In  our  law  at  least,  there 
is  no  authority  which  says  that  the  underwriters  are  not  liable 


XXVI.  ] 


ONTARIO  LAW  REPORTS. 


69 


for  a loss,  the  proximate  cause  of  which  is  one  of  the  enumerated 
risks,  but  the  remote  cause  of  which  may  be  traced  to  the  mis- 
conduct of  the  master  and  mariners.’ ’ The  very  learned  Judge 

refers  to  many  authorities  also  in  foreign  laws,  and  holds  “that 
the  assured  are  entitled  to  recover,  as  for  a loss  by  fire,  although 
that  fire  was  produced  by  the  negligence  of  the  person  having 
the  charge  of  the  ship  at  the  time.” 

Walker  v.  Maitland  (1821),  5 B.  & Aid.  171,  at  p.  175,  Bishop 
v.  Pentland  (1827),  7 B.  & C.  219,  at  p.  223,  Phillips  v.Nairne 
(1847),  4 C.B.  343,  at  pp.  350,  351,  Patapsco  Insurance  Co.  v. 
Coulter  (1830),  3 Peters  (S.C.)  222,  at  p.  233,  Columbia  Insurance 
Co.  v.  Lawrence  (1836),  10  Peters  (S.C.)  507,  at  p.  517,  General 
Mutual  Insurance  Co.  v.  Sherwood  (1852),  14  How.  S.C.  351,  at 
p.  366,  may  also  be  looked  at  upon  the  general  principle,  but 
must  be  read  with  caution,  as  they  have  not  the  so-called  remote 
cause,  always  the  cause  itself  of  that  which  is  proximate. 

A nice  distinction  is  indicated  by  Story,  J.,  giving  the  judg- 
ment of  the  Supreme  Court  of  the  United  States,  in  Waters  v. 
Merchants’  Louisville  Insurance  Co.  (1837),  11  Peters  (S.C.)  213. 
In  that  case,  barratry  not  being  insured  against,  the  Circuit 
Court  divided  in  opinion,  and  the  Supreme  Court  was  asked, 
amongst  other  things:  (1)  Does  the  policy  cover  a loss  of  the 
boat  by  a fire,  caused  by  the  barratry  of  the  master  and  crew? 
(2)  Does  the  policy  cover  a loss  of  the  boat  by  fire,  caused  by 
the  negligence,  carelessness,  or  unskilfulness  of  the  master  and 
crew  of  the  boat,  or  any  of  them?  The  learned  Judge  says  (p. 
219),  upon  the  first  question:  “It  assumes  that  the  fire  was 
directly  and  immediately  caused  by  the  barratry  of  the  master 
and  crew,  as  the  efficient  agents.  ...  In  this  view  of  it, 
we  have  no  hesitation  to  say,  that  . . . such  a loss  is  properly 

a loss  attributable  to  the  barratry,  as  its  proximate  cause,  as  it 
concurs  as  the  efficient  agent,  with  the  element,  eo  instanti,  when 
the  injpry  is  produced.”  But,  as  to  the  second  question,  it  was 
held  that  the  negligence  could  be  only  causa  remota. 

In  our  own  Courts  the  case  Canadian  Casualty  and  Boiler 
Insurance  Co.  v.  Boulter,  Canadian  Casualty  and  Boiler  Insurance 
Co.  v.  Hawthorne,  39  S.C. R.  558,  and  in  the  Court  below,  Haw- 
thorne v.  Canadian  Casualty  and  Boiler  Insurance  Co.,  Boulter 
v.  The  Same  (1907),  14  O.L.R.  166,  are  in  point.  There  the 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell,  J. 


70  ONTARIO  LAW  REPORTS.  [vol. 

policies  contained  a clause  that  they  did  not  cover  loss  or  damage 
resulting  from  freezing.  A pipe  connected  with  the  sprinkler- 
tank  system  burst  from  freezing,  and  the  water  ran  down  upon 
and  injured  the  stock.  The  trial  Judge,  the  Chief  Justice  of 
the  King’s  Bench,  gave  judgment  for  the  insured,  and  this  was 
sustained  by  the  Court  of  Appeal  and  the  Supreme  Court — one 
Judge  dissenting  in  each  Court.  The  Chief  Justice  of  the  King’s 
Bench  does,  indeed,  suggest  that  the  freezing  was  the  cause  of 
the  injury,  though  not  of  the  damage;  but  that  must  be  read 
in  connection  with  the  facts  of  the  case.  It  would  appear  also 
that  the  use  of  the  word  “ immediate”  had  some  influence  on 
the  Supreme  Court.  But,  taking  the  case  as  a whole,  I think  it 
is  authority  for  saying  that  the  cause  of  an  efficient  cause  is  not 
itself  an  efficient  cause  or  causa  causans. 

I think  the  appeal  should  be  allowed  in  part,  and  judgment 
entered  for  the  plaintiff  for  $10,750  and  interest  from  the  teste 
of  the  writ.  The  plaintiff  should  also  have  the  costs  of  the  trial; 
success  being  divided,  there  should  be  no  costs  of  the  appeal. 

The  following  have  a more  or  less  indirect  bearing  upon  the 
matters  discussed:  Trew  v.  Railway  Passengers  Assurance  Co. 
(1860),  5H.&N.  211;  S.C.  (1861),  7 Jur.  N.S.  878  (Cam.  Scacc.); 
Reynolds  v.  Accidental  Insurance  Co.,  22  L.T.N.S.  820;  In  re 
Etherington  and  Lancashire  and  Yorkshire  Accident  Insurance  Co., 
[1909]  1 K.B.  591;  Clover  Clayton  & Co.  Limited  v.  Hughes, 
[1910]  A.C.  242;  Dudgeon  v.  Pembroke  (1877),  2 App.  Cas.  284; 
Accident  Insurance  Co.  v.  Crandal  (1887),  120  U.S.  527;  Canadian 
Railway  Accident  Insurance  Co.  v.  Haines  (1911),  44  S.C.R.  386. 

Latchford,  J. : — I think  the  finding  of  the  learned  trial  Judge, 
that  the  accident  to  the  deceased  happened  because  of  a fit, 
is  amply  warranted  by  the  evidence. 

It  is  urged,  however,  that  the  death  of  Wadsworth  resulted 
from  burns,  and  not  from  fits;  and  that,  therefore,  Part  G should 
not  have  been  considered  in  determining  the  amount  payable 
by  the  defendants. 

The  insurance  is  expressed  to  be  “against  bodily  injuries 
caused  solely  by  external,  violent,  and  accidental  means,”  as 
specified  in  a schedule. 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Riddell,  J. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


71 


In  the  first  part  of  the  schedule,  under  the  heading  “ Schedule 
of  Indemnities,”  it  is  provided — “Part  A” — that,  “if  any  of  the 
following  disabilities  shall  result  from  such  injuries  alone,  within 
ninety  days  from  the  date  of  accident,  the  company  will  pay, 
in  lieu  of  any  other  indemnity,  for  loss  of  life  . . . hands 

. . . . feet  . . . entire  sight  of  both  eyes  . . . the 

principal  sum.”  This  sum  is  $5,000  under  each  of  the  two 
policies  sued  on,  with  an  annual  increase  at  the  rate  of  five  per 
cent. 

Loss  of  life  is  thus  defined  as  “a  disability r” 

A disability,  to  form  the  basis  of  any  claim  against  the  com- 
pany, “ shall  result  from  . . . bodily  injuries  . . . caused 

solely  by  external,  violent,  and  accidental  means.” 

The  foundation  of  the  plaintiff’s  action  is,  that  her  husband’s 
death  resulted  from  or  was  caused  by  injuries  which  were  them- 
selves caused  by  specified  means.  Mrs.  Wadsworth  was  obliged 
to  establish  and  did  establish  that  external,  violent,  and  acci- 
dental means  caused  injuries  to  her  husband,  and  that  injuries 
caused  by  such  means  caused  his  death. 

So  much  it  seems  to  me  necessary  to  premise  before  coming 
to  the  consideration  of  the  particular  provisions  of  the  contract 
around  which  the  parties  are  contending. 

The  defendants  allege  and  the  plaintiff  denies  that  Part  G 
of  the  schedule  affects,  in  the  circumstances  of  the  case,  the  amount 
to  which  Mrs.  Wadsworth  is  entitled.  If  it  does  apply,  the 
appeal  fails;  and  the  question  whether  it  applies  or  not  is,  upon 
the  facts  as  found,  merely  one  of  construction. 

Part  G has  on  principle  to  be  construed  upon  a consideration 
of  the  whole  contract.  A policy  of  insurance  is,  in  the  words 
of  Lord  Ellenborough  in  Robertson  v.  French  (1803),  4 East  130, 
at  pp.  135,  136,  “to  be  construed,  according  to  its  sense  and 
meaning,  as  collected  in  the  first  place  from  the  terms  used  in 
it,  which  terms  are  themselves  to  be  understood  in  their  plain, 
ordinary,  and  popular  sense,  unless  . . . the  context  evi- 

dently points  out  that  they  must  in  the  particular  instance, 
and  in  order  to  effectuate  the  immediate  intention  of  the  parties 
to  that  contract,  be  understood  in  some  other  special  and  peculiar 
sense.” 

The  main  object  and  intent  of  the  contract  may  be  regarded 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Latchford,  J. 


72 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Latchford,  J. 


as  limiting  any  general  words  used  having  in  view  that  object 
and  intent:  Lord  Herschell,  L.C.,  in  Glynn  v.  Margetson  & Co., 
[1893]  A.C.  351,  at  p.  355. 

Part  G cannot  in  any  way  be  considered  as  in  derogation  of 
the  object  and  intent  of  the  contract.  It  is,  as  it  purports  to 
be,  a part  of  the  contract,  and  fixes  the  amount  payable  when 
death  ( inter  alia ) occurs  from  injuries  resulting  in  certain  ways 
from  any  of  certain  stated  causes.  If  the  language  is  clear,  it 
may  be  construed  upon  the  principles  I have  referred  to;  and 
there  is  no  good  reason  why  it  should  be  given  what  is  some- 
times called  a benign  interpretation. 


So  far  as  material  here,  the  provisions  of  Part  G have  reference 
to  the  “case  of  injuries  happening  from  any  of  the  following  causes, 
viz.,  intentional  injuries  . . . fits  . . . causing  death, 

loss  of  sight  or  limb.”  “Causing”  appears  from  the  context  of 
the  whole  clause  to  be  in  the  same  grammatical  relation  to  “in- 
juries” that  “happening”  is. 

Part  G clearly  applies  whenever  injuries  which  cause  death 
“happen”  by  accidental  means  from  any  of  the  specified  causes, 
including  a fit  or  “fits.” 

The  injuries  from  which  Wadsworth  died  happened  from  “fits,” 
according  to  the  finding  of  the  trial  Judge. 

For  the  plaintiff  it  is  contended  that  the  “fits”  must  be 
shewn  to  be  the  immediate,  proximate  cause  of  death,  before  the 
defendants  can  invoke  the  provisions  of  Part  G in  their  favour. 
So  to  construe  Part  G is,  in  my  opinion,  to  subject  it  to  a strain 
which,  upon  consideration  of  the  whole  contract,  it  cannot  bear. 

“In  case  of  injuries,”  in  Part  G,  has  reference  manifestly  to 
injuries  of  the  kind  insured  against — injuries  resulting  in  dis- 
ability, and  “caused  solely  by  external,  violent,  and  accidental 
means.”  The  succession  of  events  directly  resulting  from  the 
paroxysm — the  overturning  and  breaking  of  the  lighted  lantern, 
the  escape  and  ignition  of  the  oil,  the  flames  which  enveloped 
Wadsworth,  his  inability  owing  to  unconsciousness  to  give  any 
alarm  or  extinguish  his  burning  clothing — all  are,  in  my  opinion, 
but  “means,”  within  the  true  intendment  of  the  policy,  lying 
between  the  fit  as  a cause  and  the  injuries  as  an  effect  of  that 
cause.  This  conclusion  appears  all  the  more  reasonable  if  one 
considers  some  of  the  “causes”  enumerated  in  the  same  category 


XXVI.] 


ONTARIO  LAW  REPORTS. 


73 


as  “fits.”  “Sleep-walking,”  for  instance,  cannot  be  the  imme- 
diate cause  of  “injuries  causing  death,  loss  of  sight  or  limbs.” 
Some  accident  must  intervene;  some  means  must  lie  between 
the  mere  somnambulism  and  any  serious  injury  caused  while  in 
that  state. 

No  support  is,  I think,  given  to  the  plaintiff's  contention 
by  the  cases  which  have  been  cited  on  her  behalf.  They  are  but 
illustrations  of  the  application  of  the  maxim,  In  jure  non  remota 
causa  sed  proxima  spectatur ; and  they  apply,  in  matters  of  con- 
tract, wherever  the  agreement  either  expressly  or  by  implica- 
tion provides  that  the  immediate  cause  must  be  looked  to. 

The  many  cases  in  which  liability  of  insurers  for  loss  caused 
by  fire  has  been  considered  are  authority  for  the  proposition 
that,  where  such  a loss  has  been  insured  against,  it  is  immaterial 
that  the  fire  itself  was  caused  by  the  negligence  of  the  agents 
or  servants  of  the  assured.  The  fire  was  the  proximate  cause 
of  the  loss  sustained,  and  the  cause  of  that  cause  could  not  be 
regarded.  But,  if  the  policies  had  provided  that  there  should 
be  no  liability  in  case  the  fire  resulted  from  such  negligence,  the 
decisions  referred  to  would  have  been  given  for  the  defendants. 

The  case  is  not,  to  my  mind,  one  in  which  it  is  necessary  to 
consider  whether  the  epileptic  paroxysm  was  or  was  not  the 
immediate  and  proximate  cause  of  death.  If  it  were,  I should 
feel  myself  bound  by  Winspear  v.  Accident  Insurance  Co.,  6 
Q.B.D.  42,  and  Lawrence  v.  Accidental  Insurance  Co.,  7 Q.B.D. 
216.  In  both  of  these  cases,  as  Lord  Justice  Collins  points  out  in 
Hensey  v.  White,  [1900]  1 Q.B.  481,  at  p.  485,  there  was  a for- 
tuitous unexpected  element — the  presence  of  a stream  in  the 
one  case  and  of  a moving  railway  train  in  the  other — which 
turned  a normal  condition  of  affairs  into  a catastrophe.  The 
fit  did  not  cause  the  stream  to  drown  Winspear.  His  condition 
did  not  cause  the  stream  to  flow  where  it  was  flowing  when  he 
fell  into  it.  Lord  Justice  Collins  points  out  that  it  was  just  as 
though  the  epileptic  had  been  struck  by  lightning  while  lying 
on  the  ground.  Nor  did  the  fit  in  the  Lawrence  case  cause  the 
train  to  run  which  passed  over  the  neck  and  body  of  the  deceased. 
The  decision  in  Hensey  v.  White,  as  to  what  is  an  “injury  by 
accident,”  within  the  meaning  of  the  Workmen's  Compensation 
Act,  1897,  was  overruled  in  Fenton  v.  Thorley  & Co.  Limited, 


D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Latchford,  J. 


74 

D.  C. 
1912 

Wadsworth 

v. 

Canadian 

Railway 

Accident 

Insurance 

Co. 

Latchford,  J. 


ONTARIO  LAW  REPORTS.  [vol. 

[1903]  A.C.  443;  but  that  circumstance  in  no  way  affects  the 
force  of  the  observations  I have  quoted. 

And  the  reason  occurs  to  me  why  the  Winspear  and  Lawrence 
cases  are  distinguishable.  In  both  (as  here)  the  insurance  was, 
inter  alia,  against  death  by  accident.  But  in  each  there  was  an 
exception,  that  there  should  be  no  liability  in  certain  circum- 
stances. The  defendants  were  obviously  liable  unless  they  could 
clearly  bring  themselves  within  the  exceptions  which,  upon  well 
recognised  principles,  were  to  be  construed  most  strongly  against 
the  defendants.  The  exceptions  were  held  not  to  be  open  to  the 
defendants,  because  the  accidents  were  not  caused  directly  and 
proximately  by  the  excepted  causes.  In  the  present  case,  the 
clause  Part  G,  relied  on  by  the  defendants,  is  not  in  the  nature 
of  an  exception.  It  is  as  much  a term  of  the  contract  as  the 
“face,”  as  it  has  been  called,  of  the  policy,  and  simply  states 
circumstances  in  which  the  amount  of  the  company’s  liability  is 
to  be  one  sum,  instead  of  another  fixed  by  a different  term  of 
the  policy.  Moreover,  the  fit,  as  I have  stated,  was  the  causa 
causans  of  the  breaking  of  the  lantern  and  of  the  consequent 
injuries  and  death.  If,  in  the  Winspear  case,  the  assured  had, 
because  of  the  fit,  let  loose  a flood  of  water  which  overwhelmed 
him,  or,  in  the  Lawrence  case,  the  assured  had,  because  of  the 
fit,  started  the  engine  which  killed  him — the  decisions,  notwith- 
standing the  rules  of  construction  applicable  to  exceptions,  would 
have  been  different. 

I am  unable  to  see  any  reason,  either  upon  principle  or  author- 
ity, why  the  judgment  appealed  from  should  not  be  affirmed. 

Appeal  allowed  in  part;  Latchford,  J.,  dissenting . 


XXVI.] 


ONTARIO  LAW  REPORTS. 


75 


[MIDDLETON,  J.] 

Youlden  v.  London  Guarantee  and  Accident  Co.  1912 

Accident  Insurance — Death  Claim — Cause  of  Death — Injury  from  Lifting  March  12 
Heavy  W&ight — Evidence — Statement  of  Deceased — Admissibility — 

Conditions  of  Original  Policy — 'Non-compliance  with — Renewal  Re- 
ceipt— Fresh  Contract — Reference  to  Original  Policy — Sufficiency — 

Insurance  Act , R.S.O.  1897,  ch.  203,  sec.  144. 

In  an  action  by  the  beneficiary  under  a contract  insuring  Y.  against  acci- 
dent and  death  from  accident,  to  recover  the  amount  payable  upon 
death  from  accident,  it  appeared  that,  on  the  day  before  his  death,  Y. 
had  lifted  a heavy  weight,  and,  shortly  after  doing  so,  had  stated  to 
'S.  that  he  thought  he  had  hurt  himself.  According  to  the  medical 
evidence,  the  malady  from  which  Y.  died  was  caused  by  the  invasion  of 
the  system  by  pernicious  bacteria,  and  this  invasion  might  have  been 
occasioned  by  an  internal  injury: — 

Held,  that  evidence  of  the  statement  made  to  S.  was  admissible  for  the 
purpose  of  proving  the  physical  condition  of  Y.,  and  was  sufficient  to 
establish  that,  shortly  after  Y.  had  been  engaged  in  lifting,  he  had,  as 
he  said,  indications  that  he  had  been  hurt. 

Gilbey  v.  Great  Western  R.W.  Co.  (1910),  102  L.T.R.  202,  specially  re- 
ferred to. 

And  held,  that  from  the  fact  of  the  injury  the  inference  might  be  drawn 
that  the  lifting  was  the  cause  of  it;  the  symptoms  indicated  that  Y. 
did  suffer  an  injury  in  lifting;  and,  upon  the  evidence,  this  injury 
was  the  cause  of  his  death — it  being  a possible  cause  and  the  only 
one  of  several  possible  causes  shewn  to  have  actually  existed;  and  the 
evidence  shewed  that  up  to  the  happening  of  the  accident  Y.  appeared 
to  be  in  perfect  health. 

In  re  Etherington  and  Lancashire  and  Yorkshire  Accident  Insurance  Co., 

[1909]  1 K.B.  591,  followed. 

The  policy  issued  upon  the  original  insurance,  in  1902,  contained  pro- 
visions and  stipulations  as  to  notice,  made  conditions  precedent  to  the 
right  to  recover;  and  these  had  not  been  complied  with.  This  policy 
did  not  contemplate  any  renewal;  it  evidenced  an  insurance  for  one 
year  only.  The  plaintiff  relied  upon  what  was  called  a renewal  re- 
ceipt, as  a new  contract  of  insurance.  It  did  not  contain  the  provi- 
sions as  to  notice;  it  evidenced  an  insurance  for  a year  “according  to 
the  tenor”  of  the  original  policy,  referring  to  it  by  number: — 

Held,  that  the  contract  evidenced  by  the  renewal  receipt  was  to  be  re- 
garded as  a new  insurance,  depending  entirely  upon  a new  agreement 
between  the  parties. 

Carpenter  v.  Canadian  Railway  Accident  Insurance  Co.  (1909),  18  O.L.R. 

388,  followed. 

But  held,  that  the  reference  to  the  former  policy  was  a sufficient  compli- 
ance with  the  provisions  of  the  Insurance  Act,  R.S.O.  1897,  ch.  203, 
sec.  144,  requiring  the  terms  and  conditions  of  the  contract  to  be  set 
out  on  the  face  or  back  of  the  instrument;  and,  therefore,  by  reason 
of  the  plaintiff’s  non-compliance  with  the  conditions  of  the  original 
policy,  she  could  not  recover. 

Venner  v.  Sun  Life  Insurance  Co.  (1890),  17  S.C.R.  394,  and  Jordan  v. 

Provincial  Provident  Institution  (1898),  28  S.C.R.  554,  followed. 

The  plaintiff  sued  as  beneficiary  under  a policy  issued  by  the 
defendants,  insuring  the  late  Henry  Youlden  against  accident 
and  death  from  accident,  to  recover  the  sum  named  in  the  policy. 


76 

Middleton,  J, 

1912 

Youlden 

V. 

London 

■Guarantee 

and 

Accident 

Co. 


ONTARIO  LAW  REPORT'S.  [vol. 

February  27.  The  action  was  tried  before  Middleton,  J., 
without  a jury,  at  Kingston. 

J.  L.  Whiting,  K.C.,  for  the  plaintiff. 

W.  N.  Tilley  and  C.  Swabey,  for  the  defendants. 

March  12.  Middleton,  J. : — The  deceased  had  been  insured 
with  the  defendants  for  some  years,  the  policy  having  been  issued 
on  the  7th  January,  1902,  and  the  renewal  premium  paid  on  the 
2nd  January,  1909. 

On  the  23rd  June,  1909,  shortly  after  his  dinner,  the  de- 
ceased— a member  of  a firm  carrying  on  a foundry  business  in 
Kingston — was  at  the  railway  station,  superintending  and  assist- 
ing in  the  loading  of  a retort  upon  a railway  car.  The  retort 
weighed  about  three  and  a half  tons,  and  had  to  be  transferred 
from  a dray  to  the  railway  car  by  means  of  jacks  and  other 
appliances.  For  the  purpose  of  making  a way  for  removing  the 
retort,  a heavy  stick  of  timber,  lying  upon  the  railway  premises, 
was  desired  to  be  used.  This  weighed  from  five  to  six  hundred 
pounds.  Youlden  attempted  to  carry  one  end  of  this,  wdiile  the 
other  end  was  carried  by  two  men.  His  partner  Selby  went 
to  his  assistance;  and  shortly  afterwards  Youlden  remarked  to 
him  that  he  was  afraid  he  had  injured  himself.  He  then  sat 
in  the  shade  at  the  station  for  a time,  and,  feeling  faint,  he 
went  with  Selby  to  an  hotel  and  took  a glass  of  whisky  and 
soda,  and  thereafter  did  no  more  work,  but  returned  to  the 
shop  upon  a rig,  and  sat  around  doing  little  or  nothing  until  six 
o’clock,  when  he  went  home.  The  same  evening,  without  taking 
any  supper,  he  went  to  a garden  party,  where  a presentation 
was  to  be  made  in  which  he  was  much  interested.  During  the 
evening  he  partook  sparingly  of  ice-cream,  and  went  home  at  a 
little  after  ten  o’clock.  His  wife,  hearing  that  he  was  unwell, 
followed  him  home;  and  shortly  thereafter  he  lay  down  upon  a 
sofa  to  rest  for  the  night,  in  a dressing-gown.  During  the  night 
he  was  uncomfortable  and  restless,  could  not  sleep,  and,  his  wife 
said,  “looked  miserable  and  grey.”  Nevertheless,  he  went  to 
the  office  in  the  morning,  but  stayed  there  only  a short  time,  re- 
turning in  about  half  an  hour.  A doctor  was  called,  and  found 
him  weak  and  in  pain.  He  had  then  had  a violent  motion  of 
the  bowels,  and  appeared  to  be  generally  collapsed.  By  the 


XXVI.] 


ONTARIO  LAW  REPORTS. 


77 


evening  his  temperature  was  high  and  there  was  further  bowel 
trouble.  The  case  developed  into  a case  of  acute  enteritis,  which 
would  not  yield  to  treatment,  and  finally  caused  his  death. 

The  plaintiff  alleges  that  a strain  was  caused  by  the  exertion 
of  lifting  the  timber,  and  that,  this  strain  brought  about  a physi- 
cal condition  which  enabled  bacteria  in  the  digestive  tract  to 
develope  to  such  an  extent  that  death  resulted  from  his  in- 
ability to  resist  their  attack,  by  reason  of  the  reduced  vitality 
following  the  strain  in  lifting  the  timber. 

At  the  trial  I admitted  in  evidence,  against  the  protest  of 
the  defendants’  counsel,  the  statement  made  by  the  deceased  to 
his  partner  Selby,  shortly  after  he  had  lifted  the  timber,  that  he 
thought  he  had  hurt  himself.  It  is  argued  that,  apart  from  this, 
there  is  no  evidence  of  the  existence  of  a strain.  The  medical 
men  stated  that  there  was  no  physical  condition  indicating  a 
strain;  that  the  injury,  if  it  existed,  was  internal  only;  and 
that  the  only  knowledge  they  had  of  its  existence  would  be 
from  statements  made  to  them  by  the  patient  of  his  symptoms, 
and  the  history  of  the  case.  The  symptoms  made  it  quite  plain 
that  the  malady  was  caused  by  the  invasion  of  the  system  by 
pernicious  bacteria.  This  invasion,  in  the  opinion  of  the  doctors, 
might  well  be  occasioned  by  any  injury  to  the  system  which 
rendered  it  unable  to  manifest  the  normal  resistance  of  a healthy 
and  uninjured  individual ; but  the  result  might  follow  equally 
from  anything  which  would  bring  about  a marked  reduction  of 
vitality,  or  it  might  follow  from  the  introduction  of  pernicious 
bacteria  in  the  food  taken — the  latter  being  the  general  origin 
of  such  a malady.  The  ice-cream  taken  the  evening  before,  if 
impure  or  tainted,  would  adequately  account  for  the  condition 
found. 

It,  therefore,  becomes  a matter  of  great  importance  to  ex- 
amine the  propriety  of  my  ruling.  In  Garner  v.  Township  of 
Stamford  (1903),  7 O.L.R.  50,  the  Divisional  Court  had  to  con- 
sider the  admissibilty  of  the  statement  made  by  the  deceased 
when  she  was  discovered  a short  time  after  an  accident  upon  a 
highway.  Her  statement  was  made  in  reply  to  a question  as  to 
the  cause  of  the  injury.  The  statement  was  tendered  as  being 
part  of  the  res  gestae , but  was  rejected;  because  the  rule  there 


Middleton,  J. 

1912 

Youlden 

London 

Guarantee 

and 

Accident 

Co. 


78 


ONTARIO  LAW  REPORTS. 


[VOL. 


Middleton,  J. 

1912 

Youlden 

V. 

London 

Guarantee 

and 

Accident 

Co. 


invoked  only  makes  statements  admissible  when  they  are  in- 
voluntary exclamations  at  the  time  of  the  accident,  and  does  not 
warrant  the  reception  of  statements  or  exclamations  made  after 
there  has  been  time  for  reflection. 

Gilbey  v.  Great  Western  R.W.  Co.  (1910),  102  L.T.R.  202, 
is  a later  decision  of  the  Court  of  Appeal,  perhaps  somewhat 
closer  to  this  case.  Compensation  was  claimed  in  respect  of  an 
accident  under  the  Workmen’s  Compensation  Act.  It  was 
alleged  that  the  deceased,  while  carrying  a side  of  beef,  so 
strained  himself  as  to  cause  an  injury  to  his  lungs.  The  post 
mortem  examination  disclosed  a tear  in  the  lung  and  made  it 
plain  that  this  brought  about  death.  The  Judge  of  the  County 
Court  admitted  in  evidence  the  statements  of  the  workman  to 
his  wife,  not  merely  of  his  sensations  and  of  his  feelings,  but  as 
to  the  cause  and  occasion  of  the  injury  from  which  he  was 
suffering.  In  the  judgment  of  the  Court  of  Appeal  the  prin- 
ciple applicable  here  is  pointed  out.  Cozens-Hardy,  M.R.,  says : 
“I  do  not  doubt  at  all  that  statements  made  by  a workman  to 
his  wife  of  his  sensations  at  the  time,  about  the  pain  in  the  side 
or  head,  or  what  not — whether  those  statements  were  made  by 
groans  or  by  actions  or  were  verbal  statements — would  be  ad- 
missible to  prove  the  existence  of  those  sensations.  But  to  hold 
that  those  statements  ought  to  go  farther  and  to  be  admitted  as 
evidence  of  the  facts  deposed  to  is,  I think,  open  to  doubt;  such 
a contention  is  contrary  to  all  authority.” 

The  Irish  Court  of  Appeal,  Wright  v.  Kerrigan,  [1911]  2 
I.R.  301,  had  before  it  a claim  under  the  Workmen’s  Compensa- 
tion Act,  where  part  of  the  evidence  tendered  was  a statement  of 
the  deceased  to  a doctor  as  to  how  the  injury  was  received. 
Cherry,  L.J.,  mentions  this  evidence,  saying:  “Hearsay  evidence 
is  in  some  cases  admissible,  and  the  learned  Recorder  appears  to 
me  to  have  acted  strictly  in  accordance  with  the  settled  rules 
of  evidence.  . . . He  ruled  out  statements  as  to  the  circum- 

stances of  the  accident.  He  admitted  the  statements  made  by 
the  deceased  man  to  his  medical  attendant  . . . as  to  his 

symptoms  and  their  cause.  Such  statements  are  usually  held 
to  be  admissible  upon  the  ground  that  there  is  no  other  means 
possible  of  proving  bodily  or  mental  feelings  than  by  the  state- 
ments of  the  person  who  experiences  them.” 


XXVI.] 


ONTARIO  LAW  REPORTS. 


79 


In  Amys  v.  Barton , [1911]  W.N.  205,  the  accuracy  of  this 
statement  of  the  law  was  canvassed  by  the  Court  of  Appeal,  and 
Cozens-Hardy,  M.R.,  pointed  out  that  the  words  “and  their 
cause”  in  the  statement  by  Cherry,  L.J.,  could  not  be  sup- 
ported, but  appeared  to  approve  of  the  rule  as  stated,  with  this 
exception. 

In  the  9th  edition  (1910)  of  Powell  on  Evidence,  p.  358,  the 
admissibility  of  statements  for  the  limited  purpose  of  proving 
the  physical  condition  of  the  person  making  the  statement  is 
asserted ; and  I think  for  this  purpose  the  evidence  was  properly 
admitted,  and  it  is  sufficient  to  establish  that,  shortly  after  the 
deceased  had  been  engaged  in  lifting  the  timber,  he  had,  as  he 
said,  indications  that  he  had  been  hurt. 

The  statement,  perhaps,  did  not  go  so  far  as  to  indicate  that 
the  lifting  of  the, timber  was  the  cause  of  the  injury;  but  I 
think  that  this  is  an  inference  which  may  be  drawn  from  the 
fact  of  the  injury,  and  falls  within  the  principle  indicated  in 
Richard  Evans  & Co.  Limited  v.  Astley,  [1911]  A.C.  674,  678, 
where  it  is  said:  “The  applicant  must  prove  his  case.  This  does 
not  mean  that  he  must  demonstrate  his  case.  If  the  more  prob- 
able cause  is  that  for  which  he  contends,  and  there  is  anything 
pointing  to  it,  then  there  is  evidence  for  a Court  to  act  upon. 
Any  conclusion  short  of  certainty  may  be  miscalled  conjecture 
or  surmise,  but  Courts,  like  individuals,  habitually  act  upon 
a balance  of  probabilities.  ’ ’ See  also  the  decisions  of  the 
Supreme  Court  of  Canada  in  McKeand  v.  Canadian  Pacific  R. 
W.  Co.,  not  yet  reported,  and  in  Grand  Trunk  R.W.  Co.  v. 
Griffith  (1911),  45  S.C.R.  380. 

Acting  upon  this  principle,  I find  that  the  symptoms  indi- 
cate that  the  deceased,  at  this  time,  did  suffer  an  injury  in 
lifting  the  timber  in  question;  and  I further  find  that  this 
injury  was  the  cause  of  his  death.  I believe  this  to  be  the  cause, 
because,  as  I understand  the  medical  evidence,  it  is  a possible 
cause,  and  it  is  the  only  one  of  the  several  possible  causes  which 
is  shewn  to  have  actually  existed.  There  is  no  evidence  that 
the  ice-cream  eaten  was  tainted;  and  the  evidence  satisfies  me 
that  up  to  the  happening  of  the  accident  the  deceased  appeared 
to  be  in  perfect  health.  This  brings  the  case  within  the  decision 


Middleton,  J. 

1912 

Youlden 

V. 

London 

•Guarantee 

AND 

Accident 

Co. 


80 

Middleton,  J. 
1912 

Youlden 

V. 

London 

GlTABANTEiE 

AND 

Accident 

Co. 


ONTARIO  LAW  REPORTS.  [vol. 

of  the  Court  of  Appeal  in  In  re  Etherington  and  Lancashire  and 
Yorkshire  Accident  Insurance  Co.,  [1909]  1 K.B.  591. 

It  is,  therefore,  necessary  to  consider  the  other  matters  dealt 
with  upon  the  argument. 

The  policy,  issued  in  1902,  contains  provisions  and  stipula- 
tions as  to  notice  wdiich,  it  is  admitted,  were  not  complied  with, 
and  which  are  made  conditions  precedent  to  the  right  to 
recover. 

The  plaintiff  contends  that  the  terms  of  this  policy  are  not 
binding  upon  her,  because  the  renewal  receipt,  as  it  is  called, 
constitutes  a new  contract  of  insurance ; and,  by  sec.  144  of  the 
Insurance  Act,  R.S.O.  1897,  ch.  203,  “the  terms  and  conditions 
of  the  contract”  not  having  been  “set  out  by  the  corporation  in 
full  upon  the  face  or  back  of  the  instrument  forming  or  evid- 
encing the  contract,”  “no  term  of,  or  condition,  stipulation, 
warranty  or  proviso,  modifying  or  impairing  the  effect  of  any 
such  contract  made  or  renewed  after  the  commencement  of  this 
Act  shall  be  good  and'  valid,  or  admissible  in  evidence  to  the 
prejudice  of  the  assured  or  beneficiary.” 

Is  this  a new  contract  within  the  meaning  of  the  statute? 
The  original  contract,  unlike  many  insurance  policies,  does  not 
contemplate  any  renewal.  It  is  an  insurance  for  one  year,  and 
one  year  only ; and,  upon  the  principle  acted  upon  by  the  Court 
of  Appeal  in  Carpenter  v.  Canadian  Railway  Accident  Insur- 
ance Co.  (1909),  18  O.L.R.  388,  the  contract  evidenced  by  the 
renewal  receipt  is  to  be  regarded  as  a new  insurance,  depending 
entirely  upon  a new  agreement  between  the  parties.  I do  not 
think  that  this  is  at  all  in  conflict  wTith  Liverpool  and  London 
and  Globe  Insurance  Co.  v.  Agricultural  Savings  and  Loan  Co. 
(1903),  33  S.C.R.  94,  where  the  decision  of  the  Court  of  Appeal, 
Agricultural  Savings  and  Loan  Co.  v.  Liverpool  and  London  and 
Globe  Insurance  Co.  (1901),  3 O.L.R.  127,  is  reversed. 

This  new  contract  is,  according  to  the  terms  of  the  receipt,  a 
contract  of  insurance  for  a year  “according  to  the  tenor  of 
policy  565996.” 

Referring  in  the  first  place  to  the  statute  itself,  the  intention 
of  the  Legislature  appears  to  be  plain.  The  contract  to  insure 
is  to  stand,  but  it  is  to  be  purged  of  all  terms  and  conditions 
modifying  the  primary  contract  in  the  interest  of  the  company 


XXVI.] 


ONTARIO  LAW  REPORTS. 


81 


and  to  the  prejudice  of  the  insured,  unless  the  terms  are  set 
out  upon  the  face  or  back  of  the  instrument  evidencing  the  con- 
tract. “Instrument”  must  be  understood,  in  the  light  of  the 
Interpretation  Act,  as  meaning  “instrument  or  instruments;” 
and  the  contention  of  the  company  is,  that  the  reference  in  the 
receipt  to  the  original  policy  constitutes  it  one  of  the  instru- 
ments forming  or  evidencing  the  contract,  and  that  its  terms 
are,  therefore,  binding;  and,  in  the  alternative,  that  the  refer- 
ence to  the  former  policy  is  a sufficient  compliance  with  the  Act. 
The  contention  of  the  assured  is,  that  the  Legislature  intended 
to  render  insufficient  a mere  reference  to  some  other  document 
in  which  the  terms  of  the  insurance  are  to  .be  found,  and  to  re- 
quire the  whole  contract  to  appear  on  the  face  of  the  single 
sealed  or  written  instrument  which  forms  or  evidences  the 
contract.  This  argument  is  much  fortified  by  sub-clauses  (a) 
and  (b),  which  expressly  permit  the  application  and  the  rules 
of  friendly  societies  to  be  embodied  in  the  contract  by  reference. 

The  cases  I find  to  be  very  difficult.  In  Venner  v.  Sun  Life 
Insurance  Co.  (1890),  17  S.C.R.  394,  the  statute  under  con- 
sideration was  the  Dominion  Insurance  Act,  R.S.C.  1886,  ch. 
124,  sec.  27.  This  provided  that  “no  condition,  stipulation  or 
proviso  modifying  or  impairing  the  effect  of  any  policy  . . . 

shall  be  good  or  valid  unless  such  condition,  stipulation  or  pro- 
viso is  set  out  in  full  on  the  face  or  back  of  the  policy.  ’ ’ There 
the  policy  had  been  issued  “upon  the  representations,  agree- 
ments and  stipulations”  contained  in  the  application;  and  the 
Supreme  Court  held  that  the  section  in  question  could  not  be 
relied  upon  as  an  answer  to  a claim  that  the  policy  was  void 
by  reason  of  misrepresentation  contained  in  the  application. 

It  is  difficult  to  see  how  it  could  be  thought  that  the  section 
had  anything  to  do  with  the  question  whether  the  contract  had 
been  obtained  by  fraud.  Mr.  Justice  Taschereau,  in  the  course 
of  his  judgment,  does  not  pass  upon  this  point,  but  says  that, 
if  applicable,  the  stipulation  in  the  application  “is  in  express 
terms  referred  to  in  the  body  of  the  policy,  so  that  the  appellant 
cannot  invoke  against  the  company  section  27.”  None  of  the 
other  Judges  referred  to  the  point:  Mr.  Justice  Gwynne  giving 
reasons ; the  other  three  Judges  simply  agreeing  that  the  appeal 
should  be  dismissed. 

6 — XXVI.  O.L.B. 


Middleton,  J. 
1912 

Youlden 

V. 

London 

Guarantee 

and 

Accident 

Co. 


82 


ONTARIO  LAW  REPORTS. 


[VOL. 


Middleton,  J. 

1912 

Youlden 

V. 

London 

Guarantee 

and 

Accident 

Co. 


In  Jordan  v.  Provincial  Provident  Institution  (1898),  28 
S.C.R.  554,  the  appeal  was  from  Ontario,  and  the  statute  under 
consideration  was  the  Ontario  Act,  55  Viet.  ch.  39,  sec.  33.  This 
statute  modified  in  some  important  respects  the  earlier  Ontario 
Act,  52  Viet.  ch.  32,  sec.  4 (which  was  in  practically  the  same 
words  as  the  Dominion  statute)  and  is  identical  with  the  present 
Ontario  Act  (sub-sec.  (5)  having  been  added  in  1895  by  58  Viet, 
ch.  34,  sec.  5,  sub-sec.  10).  The  policy  was  in  substantially  the 
same  form  as  that  under  consideration  in  the  Venner  case.  It 
was  issued  in  consideration  of  the  statements  contained  in  the 
application.  There  was  material  misstatement.  The  judgment 
of  the  Supreme  Court  is  given  by  Sedgewiek,  J.,  who  says:  “We 
consider  that  the  Ontario  Insurance  Act  of  1892,  section  33,  sub- 
section 1,  was  complied  with  in  the  present  case,  following,  as 
we  do,  the  decision  in  the  case  of  Venner  v.  Sun  Life  Insurance 
Co:’  0 


This  precludes  my  independent  consideration  of  the  question, 
as  I think  it  is  an  authoritative  statement  that,  notwithstanding 
the  provision  of  the  Act,  the  section  in  question  is  complied  with 
when  the  document  relied  upon  is  referred  to  and  sufficiently 
identified  in  the  contract.  Had  the  Supreme  Court  not  seen  fit 
to  place  its  judgment  upon  this  ground,  I should  have  thought 
it  apparent  from  the  terms  of  the  statute  that  the  application 
might  be  identified  by  reference,  and  that  this  express  pro- 
vision found  in  clause  ( b ) went  far  to  indicate  that  this  was 
intended  to  be  an  exception  to  the  general  rule. 

The  question  again  rose  in  Hay  v.  Employers’  Liability  As- 
surance Corporation  (1905),  6 O.W.R.  459,  where  Mr.  Justice 
Osier  says:  “Whatever  other  construction  we  might  have  felt 
ourselves  at  liberty  to  place  upon  sec.  144,  sub-sec.  (1),  of  the 
Ontario  Insurance  Act,  R.S.O.  1897,  ch.  203,  we  are  now  bound 
by  the  decisions  of  the  Supreme  Court  of  Canada  ...  to 
hold  that  the  plaintiffs’  proposal  and  the  statements  therein 
contained  are,  by  reference  thereto  in  the  policy,  sufficiently  in- 
corporated therewith  and  set  out  in  full  therein,  within  the 
meaning  and  rquirements  of  the  . . . section.”  And  in 

Elgin  Loan  and  Savings  Co.  v.  London  Guarantee  and  Accident 
Co.  (1906),  11  O.L.R.  330,  this  statement  is  adhered  to. 


XXVI.  ] 


ONTARIO  LAW  REPORTS. 


83 


I cannot  see  any  ground  upon  which  I should  be  justified  in 
attempting  to  distinguish  the  case  in  hand  from  what  is  said 
in  the  authorities  referred  to.  These  cases,  as  I have  already 
pointed  out,  might  have  been  rested  upon  the  fact  that  the 
application  is,  by  clause  (5),  excepted  from  the  more  general 
provision  of  the  section;  but  the  Court  has  deliberately  re- 
frained from  placing  its  decisions  upon  this  ground,  and  has 
preferred  to  adopt  a construction  of  the  clause  which,  I fear,  has 
had  the  effect  of  nullifying  the  intention  of  the  Legislature.  If 
I am  right  in  this,  it  is  admitted  that  the  plaintiff’s  action 
fails;  and  it  is  not  necessary  to  consider  the  other  questions 
argued. 

The  action  is  dismissed  without  costs. 

[IN  CHAMBERS.] 

Jarrett  v.  Campbell. 

Trial — Action  to  Establish  Will — Judicature  Act,  sec.  103 — Application  for 
Order  for  Trial  by  Jury — Refusal — Discretion — Leave  to  Appeal — Prac- 
tice. 

An  action  to  establish  a will,  transferred  from  a 'Surrogate  Court  to  the 
High  Court,  is  one  within  the  former  exclusive  jurisdiction  of  the  Court 
of  Chancery,  within  the  meaning  of  sec.  103  of  the  Judicature  Act,  R.S.O. 
1897,  ch.  51;  and  is,  therefore,  to  be  tried  without  a jury,  unless  other- 
wise ordered. 

In  the  circumstances  of  this  case,  a Judge  in  Chambers  refused  to  make  an 
order  for  trial  by  jury;  and  another  Judge  refused  leave  to  appeal  to 
a Divisional  Court. 

Review  of  the  legislation  and  practice. 

Re  Lewis  (1885),  11  P.R.  107,  approved  and.  followed. 

Motion  by  the  defendant  Campbell  for  an  order  directing 
that  the  issues  in  this  action  be  tried  by  a jury. 

March  15.  The  motion  was  heard  by  Falconbridge,  C.J.K.B., 
in  Chambers. 

R.  McKay , K.C.,  for  the  defendant  Campbell. 

E.  C.  Cattanach,  for  the  plaintiffs. 

J.  R.  Meredith,  for  the  infant  defendants. 

March  18.  Falconbridge,  C.  J. : — The  action  concerns  the 
validity  of  the  will  of  the  late  Charles  Bugg.  The  plaintiffs,  the 
executors  named  in  it,  propounded  it  for  probate  in  the  Surro- 


Middleton,  J. 

1912 

Youlden 

V. 

London 

Guarantee 

AND 

Accident 

Go. 


1912 

March  18. 
March  25. 


84 


ONTARIO  LAW  REPORTS. 


[VOL. 


Falconbridge, 

C.J. 

1912 

Jarrett 

V. 

Campbell 


gate  Court  of  the  County  of  York.  The  defendant  Campbell,  the 
only  surviving  child  and  heir-at-law  of  the  deceased,  contested 
probate,  upon  the  ground  that  the  will  was  not  duly  executed, 
and  that  the  testator  had  not  testamentary  capacity;  also  upon 
the  ground  that  the  execution  of  the  will  was  obtained  by  the 
undue  influence  of  the  plaintiffs’  who  are  not  only  executrices 
but  residuary  legatees  under  the  will,  and  who  beneficially  take 
the  greater  portion  of  the  testator’s  estate,  which  is  very  large. 
The  proceedings  were  transferred  from  the  Surrogate  Court  to 
the  High  Court,  and  the  order  of  transfer  reserved  to  any  party 
the  right  to  apply  for  a trial  with  a jury. 

In  Re  Lewis  (1885),  11  P.R.  107,  Ferguson,  J.,  determined 
that  a probate  action,  transferred  from  a Surrogate  Court  to 
the  High  Court,  was  a matter  over  which  the  Court  of  Chancery 
had,  at  the  time  of  the  passing  of  the  Judicature  Act,  exclusive 
jurisdiction;  this  being  at  that  time  the  criterion  upon  which 
the  right  to  demand  a jury  by  a mere  jury  notice  depended,  as 
well  as  the  criterion  as  to  the  mode  of  trial  pointed  out  by  sec. 
45  of  the  Judicature  Act  of  1881. 

Prior  to  that  statute,  Surrogate  Court  proceedings  could  be 
transferred  to  the  Court  of  Chancery,  and  became  subject  to  the 
general  provisions  of  the  Chancery  Act,  which  contained  a pro- 
vision authorizing  an  order  directing  a trial  by  jury. 

By  the  section  in  question,  in  cases  in  which  the  Court  of 
Chancery  had  exclusive  jurisdiction,  “the  mode  of  trial  shall 
be  according  to  the  present  practice  of  the  Court  of  Chancery.” 

In  the  revision  of  1887  (R.S.O.  1887,  ch.  44,  sec.  77)  this  sec- 
tion was  recast,  and  assumed  the  form  in  which  it  is  now  found, 
as  sec.  103  of  the  Judicature  Act,  R.S.O.  1897,  ch.  51,  which  pro- 
vides that  “all  causes,  matters,  and  issues,  over  the  subject  of 
which  prior  to  the  Administration  of  Justice  Act  of  1873,  the 
Court  of  Chancery  had  exclusive  jurisdiction,  shall  be  tried 
without  a jury,  unless  otherwise  ordered.”  The  change  of  date 
from  1881  to  1873  is  in  this  case  immaterial,  because  the  pro- 
vision of  the  Surrogate  Courts  Act  relating  to  transfer  of  causes 
to  the  Court  of  Chancery  is  found  in  the  Consolidated  Statutes 
of  1859.  > 

As  is  pointed  out  in  Re  Lewis,  the  legislation  here  and  in 
England  upon  this  point  has  proceeded  upon  widely  differing 


XXVI.] 


ONTARIO  LAW  REPORTS. 


85 


lines.  The  right  of  the  heir-at-law  in  England  to  have  the  issue 
devisavit  vel  non  tried  by  a jury  was  long  carefully  preserved 
to  him ; but  here  the  result  of  our  legislation  is,  that  primd  facie 
the  action  “ shall  he  tried  without  a jury,”  and  the  onus  is  upon 
the  party  seeking  to  have  a jury  to  shew  a case  justifying  it 
being  “otherwise  ordered.” 

In  this  case  everything  points  to  the  desirability  of  a trial 
without  a jury.  There  will  he  many  witnesses — it  is  said  some 
125 — and  as  many  experts  as  the  law  or  the  trial  Judge  may 
allow  to  be  called.  The  trial,  it  is  said,  will  take  two  weeks.  The 
circumstances  of  the  case  are  such  as  to  make  it  unlikely  that 
the  mind  of  the  jury  can  be  concentrated  upon  the  real  issue. 
As  said  in  the  case  already  referred  to,  “the  cause  can  properly 
and  fitly  be  disposed  of  in  the  ordinary  way  without  the  inter- 
vention of  a jury.” 

Motion  dismissed — costs  in  the  cause. 


Falconbridge, 

C.J. 

1912 

Jarrett 

V. 

Campbell 


The  defendant  Campbell  moved  for  leave  to  appeal  to  a 
Divisional  Court  from  the  order  of  Falconbridge,  C.J.K.B. 


March  22.  The  motion  was  heard  by  Boyd,  C.,  in  Chambers. 
G.  Grant , for  the  applicant. 

I.  F.  Hellmuth,  K.C.,  for  the  plaintiffs. 

J.  R.  Meredith,  for  the  infant  defendants. 


March  25.  Boyd,  C. : — This  application  seeks  to  unsettle  the 
practice  and  course  of  procedure  by  going  back  to  one  of  the 
earliest  statutes  of  old  Upper  Canada.  Yet,  even  in  England, 
the  statute  law  of  which  was,  so  far  as  applicable  to  the  condi- 
tion of  this  Province,  adopted  in  1791,  the  course  of  practice  was 
not  to  regard  the  claim  of  the  heir-at-law  to  have  an  issue  tried 
before  a jury  as  an  absolute  right,  but  one  to  be  dealt  with 
according  to  the  circumstances.  Thus  in  Man  v.  Ricketts  (1844), 
7 Beav.  93,  101,  Lord  Langdale  declined  to  direct  such  an  issue, 
the  will  having  been  otherwise  sufficiently  proved  as  against  the 
heir.  Indeed,  the  real  reason  why  the  trial  at  law,  and  therefore 
by  a jury,  was  granted  in  England,  was  because  of  “the  frail 
and  imperfect  manner  of  examining  into  facts”  then  possessed 
bv  tho.  Court  of  Chancery.  The  words  are  those  nf  Lord  Erskine 


86 


ONTARIO  LAW  REPORTS. 


Boyd,  0. 

1912 

Jarrett 

V. 

Campbell 


[VOL. 

in  White  v.  Wilson  (1806),  13  Yes.  87,  at  p.  91.  This  case  is  cited 
by  Ferguson,  J.,  and  the  wrong  volume  given  in  Re  Leivis,  11 
P.R.  107,  at  p.  108 ; and  it  is  now  not  to  be  questioned  that  such  a 
reason  does  not  exist  in  Ontario,  where  all  Courts  alike  have  the 
fullest  power  and  the  most  searching  method  of  investigating 
facts.  The  old  course  in  England  was  to  file  a bill  for  the  purpose 
of  establishing  the  will  as  against  the  heir  with  regard  to  realty. 
Then  there  would  be  a hearing  of  such  evidence  as  was  admis- 
sible in  equity  practice;  and,  if  a sufficient  primd  facie  case  of 
proof  was  made  out,  then  an  issue  would  be  directed  ( devisavit 
vel  non)  in  order  to  establish  conclusively  as  against  the  heir  the 
fact  of  a valid  will  made  by  a competent  testator.  See  the  course 
pursued  in  Waters  v.  Waters  (1848),  2 DeGr.  & Sm.  591,  599. 

The  English  practice  grew  out  of  historical  reasons.  Until 
the  Probate  Court  Act  of  1857,  20  & 21  Viet.  eh.  77,  there  was 
no  jurisdiction  to  admit  a will  of  land  to  probate.  The  only 
mode  of  testing  the  validity  of  such  will  w^as  by  an  action  of 
ejectment  between  the  heir  and  the  devisee.  But  in  our  practice 
the  probate  of  will  includes  realty  and  personalty:  realty  is 
becoming  more  and  more  assimilated  to  personalty:  with  us  the 
unique  distinction  of  heir-at-law  never  obtained,  for  all  children 
shared  equally.  All  the  reasons  which  necessitated  (almost)  a 
jury  trial  as  against  the  heir-at-law  in  England,  never  existed 
here;  and  our  practice  is  settled,  whether  the  contest  be  in  the 
lower  Court  or  upon  the  removal  of  the  contention  to  the  High 
Court,  that  the  trial  of  fact  by  jury  is  a matter  for  the  sound 
discretion  of  the  Court  or  a Judge:  R.S.O.  1897,  ch.  59,  sec.  22* 
and  sec.  35.  These  sections  are  conclusive  as  against  any  vested 
and  absolute  right  of  the  heir  to  insist  on  a trial  by  jury. 

The  practice  was  well  settled  by  a very  careful  Judge  in  1885, 
in  Re  Leivis , 11  P.R.  107 ; and  I see  no  reason  to  doubt  the 
correctness  of  the  order  of  the  Chief  Justice  of  the  King’s  Bench, 
or  to  doubt  that  he  wisely  exercised  his  discretion,  having  re- 
gard to  the  issues  raised  and  their  magnitude  and  the  complexity 
likely  to  arise  in  trying  to  sever  the  methods  of  trial  in  investi- 
gating the  facts  of  this  controversy. 

I disallow  leave  to  appeal;  and  costs  of  the  executors  and 
other  beneficiaries  opposing  should  be  paid  out  of  the  estate. 

*See  now  10  Edw.  VII.  ch.  31,  sec.  28. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


87 


[BOYD,  C.] 

Adams  v.  Gourlay. 

Will — Construction — Conditional  Gift — Revocation  upon  N on- fulfilment  of 

Condition — Distribution  among  other  Legatees  Named  in  Will — Legatee 

Named  in  Codicil — Status  of,  to  Question  Fulfilment  of  Condition — * 

Substantial  Performance  of  Condition — Cy-pres  Doctrine. 

A codicil  forms  part  of  the  will  or  testamentary  instrument,  but  not  neces- 
sarily to  all  intents  and  purposes. 

The  testator,  by  his  will,  gave  the  bulk  of  his  property  to  his  two  nieces, 
but  upon  a certain  condition,  to  be  fulfilled  in  his  lifetime,  and  which 
was  not  made  known  to  them  until  after  his  death;  and,  in  the  event  of 
their  not  fulfilling  the  condition,  he  revoked  the  devises  and  bequests 
to  them,  and  directed  that  “their  shares  be  distributed  equally  among 
the  other  legatees  named  in  this  my  will.”  A year  and  a half  later, 
he  executed  a codicil,  by  which  he  gave  a small  legacy  to  the  plaintiff, 
who  was  not  named  or  referred  to  in  the  will.  The  codicil  did  not  in 
terms  say  that  it  was  made  part  of  the  will,  but  it  confirmed  the  will 
and  gave  other  pecuniary  legacies  to  persons  not  named  in  the  will. 
After  the  testator’s  death,  the  executor,  deeming  that  the  condition  had 
been  fulfilled,  turned  over  to  the  two  nieces  the  property  bequeathed 
to  them.  The  plaintiff,  on  her  own  behalf  and  not  representing  any 
other  possible  claimants,  sued  the  executor  and  the  two  nieces  for  an 
account  and  a share  of  the  property  transferred  to  the  nieces,  alleging 
that  they  had  not  fulfilled  the  condition,  and  that  she  (the  plaintiff) 
was  entitled  as  one  of  the  other  legatees  named  in  the  will : — 

Held,  that  the  plaintiff,  being  a legatee  only  by  virtue  of  the  codicil,  was 
not  one  of  the  legatees  contemplated  in  the  will,  and  had  no  locus 
standi  to  question  the  conduct  of  the  executor  in  making  over  the  prop- 
erty to  the  two  nieces. 

Eenwood  v.  Overend  (1815),  1 Mer.  23,  and  Hall  v.  Severne  (1839),  9 Sim. 
515,  followed. 

Semble,  that  there  had  been  a substantial  performance  of  the  condition  by 
the  nieces;  and,  by  the  application  of  the  cy-pres  doctrine,  the  condition 
had  been  practically  satisfied. 

Action  for  construction  of  the  will  of  George  Baker;  for  an 
accounting  by  the  defendant  the  executor;  to  recover  from  the 
defendants  the  Misses  Baker  the  moneys  and  property  of  the 
estate  transferred  by  them  to  the  executor;  and  for  administra- 
tion. 

March  20.  The  action  was  tried  before  Boyd,  C.,  without 
a jury,  at  Stratford. 

R.  S.  Robertson,  for  the  plaintiff. 

F.  H.  Thompson , K.C.,  for  the  defendants. 

March  25.  Boyd,  C.:— The  testator  gives  the  bulk  of  his 
property  to  his  two  nieces,  who  are,  with  the  executor,  defendants, 
upon  this  condition: — 

“Upon  their  remaining  with  me  as  my  housekeepers  at  all 
times  (unless  I consent  to  one  or  both  of  them  going  out)  during 


1912 

March  25. 


88 


ONTARIO  LAW  REPORTS. 


Boyd,  0. 


1912 

Adams 

v. 

Gourlay 


[VOL. 


the  remainder  of  my  life  and  during  that  time  rendering  me  faith- 
ful service  and  giving  me  all  necessary  and  proper  attention  and 
all  proper  care  and  nursing  in  case  of  illness  or  in  case  I should 
become  feeble  and  should  they  fail  in  those  respects  or  any  of  them 
I hereby  absolutely  revoke  the  said  devise  and  bequests  to  them 
and  direct  that  in  lieu  thereof  my  executors  shall  pay  to  my  said 
niece  Sarah  Elizabeth  Baker  the  sum  of  two  hundred  dollars  only 
and  I direct  that  their  shares  be  distributed  equally  among  the 
other  legatees  named  in  this  my  will.” 


“And  I hereby  further  declare  notwithstanding  anything 
hereinbefore  contained  that  it  is  not  my  will  or  intention  that  it 
shall  be  compulsory  for  both  of  my  said  nieces  to  remain  with  me 
at  all  times  but  that  it  will  be  sufficient  if  one  of  them  is  with  me 
when  I am  in  my  usual  health  and  that  both  of  them  shall  be  pres- 
ent when  I require  the  services  of  both  and  so  notify  them.” 

The  will  was  made  in  February,  1907;  a codicil  was  added 
giving  the  legacy  of  $100  to  the  plaintiff  under  the  name  of  Ellen 
Hamilton — she  not  being  named  or  referred  to  in  the  will — codicil 
dated  in  September,  1908.  The  testator  died  on  the  27th  Sep- 
tember, 1910.  His  wife  died  in  1906,  and  he  had  no  children. 
I am  not  clear  as  to  his  age,  but  I think  it  was  about  eighty. 
The  nieces  did  not  know  of  the  terms  of  the  condition  or  of  any- 
thing that  was  in  the  will — nor  did  any  one,  according  to  the 
evidence,  but  the  solicitor  who  drew  it  (who  was  not  called  as  a 
witness).  The  nieces,  however,  lived  with  him  and  cared  for  him, 
as  it  turned  out,  according  to  the  terms  of  the  condition,  however 
strictly  construed,  from  before  the  date  of  the  will  and  just  upon 
the  death  of  his  wife,  until  the  19th  July,  1909,  when  a change  in 
his  health  and  habits  became  very  apparent,  which  had  begun 
about  the  date  the  physician  was  summoned  during  February, 
1909;  then,  at  his  instance,  more  competent  assistance  was  called 
in,  under  the  supervision  of  the  nieces,  and  this  state  of  domestic 
affairs  continued  until  his  death. 

Then  first  became  known  the  condition  expressed  in  the  will; 
and,  on  a review  of  and  with  knowledge  of  all  that  was  detailed 
before  me  in  evidence,  the  executor  paid  over  or  turned  over  to 
the  two  beneficiaries  the  property  now  claimed  (in  part)  by  the 
plaintiff.  The  plaintiff,  as  she  testified,  sues  on  her  own  behalf 


XXVI.] 


ONTARIO  LAW  REPORTS. 


89 


solely,  and  is  not  joined  by  and  does  not  represent  any  other 
possible  claimants  under  the  will. 

I expressed  my  opinion  as  the  the  effect  of  the  evidence  at  the 
close  of  the  argument,  but  reserved  judgment  generally.  I now 
deal  first  with  the  right  of  the  plaintiff  to  maintain  this  action. 

In  Henwood  v.  Overend  (1815),  1 Mer.  23,  the  residue  was  to 
be  divided  “ amongst  the  several  legatees  in  proportion  to  the 
several  sums  of  money  bequeathed  to  them  by  this  my  will.” 
By  a codicil  specified  “to  be  added  to  and  taken  as  part  of”  the 
will,  other  legacies  were  given  to  other  legatees.  Sir  William 
Grant,  M.R.,  held  that  the  legatees  under  the  codicil  were  excluded 
from  sharing  in  the  residue;  and  that  the  words  “by  this  my  will” 
were  not  less  strong  than  the  words  “hereby”  and  “hereinafter,” 
which  were  so  restrictively  construed  by  the  Lord  Chancellor  in 
Bonner  v.  Bonner  (1807),  13  Yes.  379. 

Sir  William  Grant’s  decision  was  approved  and  followed  by 
Shadwell,  V.-C.,  in  Hall  v.  Severne  (1839),  9 Sim.  515,  where  the 
residue  was  to  be  proportionably  divided  among  “the  herein- 
before mentioned  legatees;”  and  in  a codicil,  which  he  declared 
to  be  a part  of  his  will,  he  gave  other  legacies  to  other  persons 
and  also  additional  legacies  to  those  who  were  legatees  in  the  will. 
It  was  held  that  none  of  the  legatees  under  the  codicil  were  to 
share  in  the  residue  in  respect  of  their  legacies  under  the  will. 
The  Vice-Chancellor  declined  to  follow  the  case  of  Sherer  v. 
Bishop  (1792),  4 Bro.  C.C.  55,  in  which  Lord  Commissioner  Eyre 
said  that  a codicil  was  a part  of  the  testamentary  disposition, 
though  not  part  of  the  instrument,  and  on  this  ground  that  the 
residue  should  be  divided  among  legatees  (described  as  “such 
relations  only  as  are  mentioned  in  this  my  will  ”)  and  other  legatees, 
also  being  relations,  named  in  the  codicil;  the  two  other  Lords 
Commissioners,  Ashhurst  and  Wilson,  hesitating  a good  deal  at 
this  extension  of  the  word  “will”  and  doubting  the  construction. 
Shadwell,  V.-C.,  favoured  the  opinion  of  the  hesitating  and 
doubting  Judges,  and  characterised  that  of  the  Chief  Commissioner 
as  “a  very  extraordinary  one.”  The  concurrence  of  opinion  in 
two  such  Judges  as  Grant  and  Shadwell,  both  skilled  in  questions 
of  construction,  may  well  be  followed  without  hesitation.  The 
words  used  in  this  will  are  identical  with  those  used  in  the  case 
in  1 Mer. 


Boyd,  C. 

1912 

Adams 

v. 

Gourlay 


90 


ONTARIO  LAW  REPORTS. 


Boyd,  C. 

1912 

Adams 

v. 

Gourlay 


[vol. 


Looking  at  this  will  per  se,  I would  not  think  the  testator’s 
meaning  to  be  doubtful.  He  directs  that  the  property  intended 
to  be  given  to  his  two  nieces,  which,  upon  their  default  in  certain 
conditions,  is  to  be  revoked,  shall  then  be  distributed  “ equally 
among  the  other  legatees  named  in  this  my  will.”  The  codicil 
does  not  in  terms  say  that  it  is  made  part  of  the  will,  as  in  the  Severne 
case,  but  it  confirms  the  will  and  gives  other  pecuniary  legacies 
to  persons  not  named  in  the  will.  The  obvious  meaning,  to  my 
mind,  is,  that  the  testator  named  in  the  will  those  who  are  to 
share  equally  in  the  revoked  property,  and  does  not  intend  that 
the  legatees  first  named  in  the  codicil  shall  come  in  to  diminish 
what  is  given  to  those  named  in  the  will. 

It  was  said  in  argument  that  Hall  v.  Severne  has  been  dis- 
credited. On  the  contrary,  I find  it  has  not  been  impeached,  but 
rather  upheld.  It  was  followed  in  Early  v.  Benbow  (1846),  2 
Coll.  342,  and  both  cases  were  referred  to  as  authorities  by  Farwell, 
J.,  in  Re  Sealy  (1901),  85  L.T.R.  451;  and  was  held  to  be  rightly 
decided  by  Sullivan,  M.R.,  in  Donnellan  v.  O'Neill  (1871),  Ir.  R. 
5 Eq.  523,  532,  on  the  ground  that  the  shares  of  the  residue  were 
fixed  by  the  will,  and  so  were  the  persons  to  take  them,  and  there 
was  nothing  in  the  codicil  to  alter  this  express  gift.  And,  in 
addition  to  all  this,  it  was  followed  as  late  as  1907  by  a Divisional 
Court  in  Re  Miles  (1907),  14  O.L.R.  241,  a decision  binding  upon 
me. 


There  isrno  doubt  of  the  general  principle  that  a codicil  forms 
part  of  the  will  or  testamentary  instrument,  but  not  necessarily 
to  all  intents  and  purposes.  As  said  by  Lord  Hardwicke,  C.,  in 
Fuller  v.  Hooper  (1750),  2 Yes.  Sr.  242,  “the  testament  . . . . 

may  be  made  at  different  times  and  different  circumstances,  and 
therefore  there  may  be  a different  intention  at  making  one  and 
the  other.” 

I hold,  therefore,  that  the  present  plaintiff,  being  a legatee 
only  by  virtue  of  the  codicil  signed  and  made  on  the  9th  September, 
1908,  is  not  one  of  the  legatees  contemplated  in  the  will  made  on 
the  7th  February,  1907.  This  being  so,  and  as  the  evidence  is 
that  she  sues  only  for  herself  and  in  her  own  behalf,  she  has  no 
locus  standi  to  question  the  conduct  of  the  executor  in  paying  over 
the  property  devised  to  the  two  nieces,  who  take  under  the  terms 
of  the  will. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


91 


This  lessens  the  importance  of  the  main  question  as  to  whether 
these  nieces  are  entitled  to  take  the  property.  My  impression 
at  the  trial  was,  that,  upon  the  facts,  there  had  been  a sufficient 
compliance  with  the  conditions  requisite  to  their  success.  I refer 
to  my  comments  on  the  evidence  at  the  close  of  the  trial,  as 
follows : — 

I do  not  propose  to  dispose  finally  of  this  case  at  present; 
there  are  legal  questions  that  arise;  but  upon  the  evidence  I will 
just  say  a few  words  that  strike  me  now. 

There  are  two  parts  in  this  will  to  be  regarded.  The  benefits 
to  the  two  Baker  nieces  are  conditional  “upon  their  remaining 
with  me  as  my  housekeepers  at  all  times” — I leave  out  the  par- 
enthesis— “during  the  remainder  of  my  life  and  during  that  time 
rendering  me  faithful  service  and  giving  me  all  necessary  and 
proper  attention  and  all  proper  care  and  nursing  in  case  of  illness 
or  in  case  I should  become  feeble.”  Then  there  is  the  clause  put 
in,  “upon  their  remaining  with  me  as  my  housekeepers  at  all 
times  (unless  I consent  to  one  or  both  of  them  going  out).”  There 
is  a provision  there  that  there  may  be  a remission  of  the  continuous 
attendance  of  one  of  them,  or  even  of  both  of  them — going  out 
from  his  house,  and  therefore  ceasing  to  be  his  housekeepers;  and 
then  at  the  end,  which  is  to  be  taken  as  the  strongest  part  of  the 
will,  if  there  is  any  ambiguity,  there  is  his  declaration,  “I  hereby 
further  declare  notwithstanding  anything  hereinbefore  contained 
that  it  is  not  my  will  or  intention  that  it  shall  be  compulsory  for 
both  of  my  said  nieces  to  remain  with  me  at  all  times  but  that  it 
will  be  sufficient  if  one  of  them  is  with  me  when  I am  in  my  usual 
health  and  that  both  of  them  shall  be  present  when  I require  the 
services  of  both  and  so  notify  them.” 

Of  course  they  did  not  know  this.  This  was  entirely  in  the 
testator’s  breast  and  in  the  office  of  his  solicitor,  locked  up  in  the 
will;  and  neither  of  these  women  knew  anything  about  this. 
Only  the  testator  himself  knew  what  was  in  it.  He  knew  what 
was  in  the  will;  and,  whether  or  not  they  were  requested,  they 
acted  on  the  terms  of  this  will.  It  was  not  compulsory  for  both 
of  his  nieces  to  remain  with  him  at  all  times.  “It  will  be  sufficient 
if  one  is  with  me  when  I am  in  my  usual  health.”  Now,  one  or 
other  of  them  was  with  him  continuously,  under  the  strictest 
terms  of  the  will,  while  he  was  in  his  usual  health.  I think  his 


Boyd,  C. 

1912 

Adams 

v. 

Gourlay 


92 


ONTARIO  LAW  REPORTS. 


[vol. 


Boyd,  C. 

1912 

Adams 

v. 

Gourlay 


usual  health  failed,  his  usual  condition  failed,  at  the  time  the  doc- 
tor was  called  in,  in  February,  1909,  and  he  degenerated  more  or 
less  from  that  time  until  Mrs.  Mutton  was  called  in  to  take 
possession  as  housekeeper  in  July,  1909.  They  remained  with 
him  during  his  usual  health  and  down  to  the  time,  three  days 
after  the  time  in  fact,  that  Mrs.  Mutton  came  in,  and  then  they 
were  superseded  by  her  as  housekeepers;  but,  I think,  the  evidence 
amply  justifies  the  conclusion  that — whatever  his  state  of  mind 
may  have  been  from  a legal  point  of  view,  as  to  his  legal  capacity 
and  so  on — he  had  certainly  lucid  intervals,  he  was  able  to  under- 
stand matters;  and,  although  you  could  not  fully  intrust  to  him 
the  disposal  of  business,  he  understood  what  was  going  on.  I 
cannot  fail  to  reach  that  conclusion  from  the  whole  of  the  evidence, 
the  evidence  given  by  Mrs.  Mutton  herself,  as  well  as  the  evidence 
of  others.  Mrs.  Mutton  had  reasons  for  knowing,  and  she  tells 
us  that  on  one  occasion,  when  he  was  making  some  objection  to 
signing  a cheque,  they  told  him  it  was  to  pay  Mrs.  Mutton,  and 
he  signed  it.  That  corroborates  what  the  two  women  themselves 
say,  that  he  was  aware  that  they  were  collecting  his  income,  his 
rents  and  so  on,  and  that  they  were  transacting  his  financial 
business,  that  they  were  paying  Mrs.  Mutton  as  housekeeper, 
and  that  the  niece  who  had  been  housekeeper  under  wages  had 
ceased  to  receive  wages  some  time  before,  and  that  Mrs.  Mutton 
was  acting  in  her  stead  and  she  so  continued.  He  was  aware 
of  that  change;  and,  I think,  it  would  not  be  at  all  unfair  to  treat 
that  transaction,  his  knowledge  of  it,  and  his  consent  to  it,  and 
his  agreeing  that  Mrs.  Mutton  should  be  paid,  as  an  outcome 
of  this  parenthetical  clause,  “unless  I consent  to  one  or  both  of 
them  going  out.”  They  both  did  go  out.  They  necessarily 
went  out,  I think,  because  of  the  condition  of  the  man  himself, 
and  he  in  effect  consented  to  their  doing  so,  and  consented  to 
the  other  housekeeper  coming  and  being  appointed  in  their  stead. 
That  is  the  equitable  construction  to  give  to  the  will,  of  which 
I think  it  is  susceptible,  and  I am  inclined  to  think  that  the  evi- 
dence would  justify  it. 

Turning  to  the  evidence,  it  is  quite  plain  from  what  the  doctor 
said  that  it  was  unsafe  for  those  women  to  stay  there  any  longer. 
He  advised  a change.  He  did  so  with  scientific  knowledge  and 
accuracy  and  judgment  required  in  dealing  with  such  cases.  He 


XXVI.] 


ONTARIO  LAW  REPORTS. 


93 


did  not  know  anything  about  the  will.  He  was  not  actuated  one 
way  or  the  other,  but  for  the  best  interests  of  the  man  himself 
and  of  these  two  women  that  were  there;  and  he  says  that  it  was 
impossible  for  those  women  with  any  degree  of  propriety  to  stay 
there.  It  was  indelicate  and  inadvisable;  and  it  was  much 
better  in  every  way  that  this  mature  woman,  a married  woman, 
should  come  in;  and  she  proved  an  admirable  success,  but  they 
retained  the  control  of  affairs ; they  did  not  abandon  the  .old  man 
or  leave  him  to  the  tender  mercy  of  casual  strangers,  as  was  said. 
They  were  there  once  or  sometimes  twice  a week.  They  attended 
to  the  operation  of  shaving  him,  a confidential  performance, 
and  were  brought  close  to  him,  in  touch  with  him  in  a most  familiar 
way,  so  that  he  was  with  them  all  along  at  intervals,  although  he 
knew  that  they  were  not  there  continuously,  and  in  his  saner 
moments  he  may  have  appreciated  the  reason  of  their  not  being 
there;  but  he  was  content  with  the  arrangement;  he  made  no 
objection;  he  went  on  and  consented  to  Mrs.  Mutton  being 
housekeeper  and  to  their  coming  in  in  that  way  from  time  to  time 
all  through.  Now,  he  knew  what  the  conditions  were  in  his  will, 
and  he  made  no  objection  to  this  state  of  affairs  as  indicating 
that  they  were  not  carrying  out  what  he  intended  they  should  do  in 
order  to  enjoy  this  legacy.  I rather  think,  upon  the  fair  con- 
struction of  the  evidence,  that  there  was  a sufficient  performance 
within  the  meaning  of  the  terms  of  the  will,  having  regard  to  the 
flexibility  of  it  and  the  consent  which  he  might  give  to  both  of 
them  being  absent.  I do  not  finally  pass  upon  this  until  I look 
at  the  cases,  and  on  the  other  point  as  well  as  this.  It  may  be 
that  the  other  point  is  fatal.  However  that  is,  I will  reserve 
judgment  on  the  whole  case. 

True  it  is  that  ignorance  by  the  beneficiary  of  a condition 
annexed  to  a gift  by  will  does  not  protect  the  devisee  from  the 
consequences  of  not  complying  therewith:  Astley  v.  Earl  of  Essex 
(1874),  L.R.  18  Eq.  290. 

There  is  a good  deal  to  be  said  in  favour  of  the  view  presented 
by  the  defendants’  counsel  that  the  conduct  of  the  testator,  his 
words  and  acts  in  regard  to  his  nieces  and  in  their  presence,  were 
so  fraught  with  sexual  aberration  as  to  render  the  requirement 
of  residence  with  him  one  contra  bonos  mores,  within  the  meaning 
of  Brown  v.  Peck  (1758),  1 Eden  140.  This,  of  course,  does  not 


Boyd,  C. 

1912 

Adams 

v. 

Gotjrlay 


94 


ONTARIO  LAW  REPORTS. 


Boyd,  C. 

1912 

Adams 

v. 

Gourlay 


1912 

March  27. 


[VOL. 


appear  upon  the  face  of  the  condition,  and  requires  to  be  established 
(as  it  was  established)  by  the  evidence.  This  conduct  would 
absolve  them  from  continuous  residence  and  would  justify  their 
having  him  cared  for,  as  they  did,  by  a married  woman  and  her 
husband,  who  were  able  to  control  the  testator;  so  that,  in  equity, 
the  testator  himself  worked  a discharge  of  the  conditions. 

I still  think  that  there  was  a substantial  performance  of  the 
condition  by  the  nieces;  and,  if  so,  by  the  application  of  the 
cy-pres  doctrine,  the  condition  has  been  practically  satisfied.  In 
Williams  on  Executors,  assent  is  given  to  the  law  found  in  Story’s 
Equity  Jurisprudence,  that  “where  a literal  compliance  with  the 
condition  becomes  impossible  from  unavoidable  circumstances, 
and  without  any  fault  of  the  party,  it  is  sufficient  that  it  is  com- 
plied with  as  nearly  as  it  practically  can  be,  or  as  it  is  technically 
called  ‘cy-pres:’”  Williams,  10th  ed.,  p.  1013,  note  (e). 

But,  in  view  of  my  decision  upon  the  status  of  the  plaintiff, 
I do  not  further  pursue  the  inquiry  on  this  branch  of  the  case. 

The  action  should  stand  dismissed;  but  I would  give  no  costs 
against  the  plaintiff  unless  she  appeals.  Costs  out  of  the  estate 
to  the  defendants  in  any  event. 


[BOYD,  C.] 

Huegli  v.  Pauli. 

Church — Property  Rights — Religious  Institutions  Act,  36  Viet.  ch.  135, 
secs.  7,  19 — Construction — Deed  of  Conveyance  of  Church  Site  to  Trus- 
tees— Special  Trusts  not  Affected  by  Statute — Erection  of  Meeting- 
house— Subsequent  Abandonment — Removal  to  New  Building < — Effect 
as  to  Continuity  of  Beneficiary — Sale  of  Old  Site  and  Building — Reso- 
lutions of  Congregation — Breach  of  Trust — Status  of  Plaintiffs  to  Com- 
plain— Former  Members  of  Congregation — Status  of  Minister  of  New 
Congregation — “Duly  Authorised ” — Congregational  System  of  Church 
Government — Class  Action — Amendment — Remedy  for  Breaches  of 
Trust. 

In  1874,  a congregation  of  the  Evangelical  Lutheran  denomination  pur- 
chased land  in  the  town  of  Stratford  as  a site  for  a house  of  public 
worship,  and  the  land  was  conveyed  to  trustees  for  the  congregation. 
The  recitals  in  the  conveyance  shewed  that  it  was  obtained  under  the 
powers  conferred  upon  religious  societies  by  the  Act  then  in  force  respect- 
ing the  property  of  religious  institutions,  36  Viet.  ch.  135(0.),  which 
provides  (sec.  19,  now  sec.  23  of  R.S.O.  1897,  ch.  307)  that  “in  every 
case  the  special  trusts  or  powers  of  trustees  contained  in  any  . . . 

conveyance  . . . shall  not  be  affected  or  varied  by  any  of  the  pro- 
visions of  this  Act.”  Section  7 of  the  Act  gives  power  to  sell  the  land 


XXVI. 


ONTARIO  LAW  REPORTS. 


95 


when  it  becomes  unnecessary  to  be  held  for  the  religious  use  of  the  con- 
gregation, and  it  is  deemed  advantageous  to  sell.  The  recitals  shewed 
also  that  a then  existing  religious  society  or  congregation  of  Evangelical 
Lutherans  had  occasion  for  the  land  purchased  and  conveyed  as  a site 
for  a house  of  public  worship,  and  had  appointed  three  persons  (the 
trustees  to  whom  the  conveyance  was  made)  to  hold  in  perpetual  suc- 
cession, under  the  name  of  “The  Trustees  of  the  Stratford  Evangelical 
Lutheran  Church,”  for  the  use  of  the  said  society  and  upon  the  trusts 
thereinafter  set  forth.  There  were  two  special  trusts:  first,  that  the 
premises  should  be  forever  thereafter  held  for  the  use  of  the  members  of 
an  Evangelical  Lutheran  Church;  and,  second,  “that  the  trustees  shall 
at  all  times  hereafter  permit  any  minister,  he  being  duly  authorised  by 
the  said  Evangelical  Lutheran  Church  to  conduct  the  worship  thereof, 
to  officiate  in  the  church  existing  or  which  may  hereafter  be  built  on  the 
said  lot  according  to  the  ritual  ...  of  the  said  church,  and  shall 
also  apply  the  rents  and  profits  derived  from  any  portion  of  the  said  lot 
or  the  buildings  erected  thereon  towards  the  maintenance  of  public 
worship  in  the  said  church  or  meeting-house,  according  to  the  rules  . . . 
or  towards  the  repairs  or  improvement  of  the  said  property,  and  to  no 
other  purpose  whatsoever.”  The  conveyance  also  provided  that  when 
the  church  for  which  the  “trust  was  created  shall  lose  its  visibility  and 
cease  to  exist,”  the  control  of  the  property  should  pass  over  to  and  vest 
in  the  nearest  Evangelical  Lutheran  'Church  of  the  same  faith  and 
order.  The  original  society  built  and  took  possession  of  a meeting-house 
on  the  land  so  conveyed,  and  occupied  the  place  for  religious  uses  until 
December,  1908;  when  the  congregation  moved  into  a new  building  upon 
another  site,  it  having  been  previously  resolved  (practically  unanimously) 
by  the  congregation,  at  meetings  held  for  the  purpose,  that  a new  lot 
should  be  bought  and  a new  building  put  up,  and  that  the  old  lot  and 
building  should  be  sold.  After  vacating  the  old  site,  the  trustees,  acting 
on  the  direction  of  the  congregation,  rented  the  old  building,  and  applied 
the  surplus  of  rent,  after  paying  taxes  and  insurance,  for  the  benefit  of 
the  congregation  and  of  the  new  site.  The  trustees  also,  in  like  man- 
ner, sold  four  feet  of  the  land,  and  were  offering  the  rest  for  sale.  In 
February,  1911,  the  plaintiffs  and  others  began  a movement  for  the 
establishment  of  a new  congregation  of  Evangelical  Lutherans  in  Strat- 
ford. One  of  the  plaintiffs  was  a dissident  member  of  the  original 
society,  the  only  one  who  had  objected  to  the  purchase  of  the  new  site 
and  the  sale  of  the  old;  and  another  (the  plaintiff  H.)  was  a minister 
of  the  denomination  in  good  standing,  who  had  been  called  to  Stratford 
for  the  purpose  of  organising  the  new  movement.  He  became  the  pastor 
of  a new  society,  worshipping  in  a hall ; and  this  newly  organised  body, 
containing  a few  members  of  the  original  society,  applied  for  leave  to 
enter  upon  the  old  site;  and,  that  being  refused,  in  February,  1912, 
brought  this  action  against  the  trustees  of  the  new  site  and  building 
(the  successors  of  the  original  grantees),  claiming  and  practically  ad- 
mitted to  be  the  legal  owners  of  the  old  site,  for  a mandatory  order 
upon  the  defendants  to  enforce  the  re-opening  of  the  old  building  for 
public  worship,  and  to  allow  the  plaintiff  H.  to  conduct  public  worship 
therein,  and  for  a declaration  to  have  the  trusts  of  the  deed  carried  into 
execution,  and  to  have  the  sale  stayed  and  the  rents  applied  under  the 
trust  to  the  old  site: — - 

Held,  that  the  situation,  provided  for  in  the  deed,  of  the  church  for  which 
the  trust  was  created  losing  its  vitality  and  ceasing  to  exist,  had  not 
arisen:  the  vacating  of  the  old  site  was  not  equivalent  to  the  cesser  of 
existence  of  the  beneficiary. 

Held,  also,  that  the  effect  of  sec.  19  of  the  Act  (now  sec.  23)  is  to  forbid 
the  nullification  of  the  special  trusts  of  the  deed;  and,  by  the  terms  of 
the  deed,  the  land  was  acquired  for  the  possessory  use  and  benefit  of  the 
congregation,  and  was  to  be  maintained  and  improved  in  perpetuity; 
the  trust  inhered  in  the  title,  and  so  passed  to  the  successive  trustees 
indefinitely  in  futuro — not  to  be  interrupted  by  a sale  out  and  out. 


1912 

Huegli 

V. 

Pauli 


96 


ONTARIO  LAW  REPORTS. 


1912 

Huegli 

V. 

Pauli 


[VOL. 

Held,  however,  that,  as  the  organisation  of  the  church  described  in  the 
deed  was  upon  the  Independent  or  Congregational  system,  the  view  of 
the  majority  prevailed;  the  organised  body  had  power  to  change  the 
place  at  which  its  services  should  be  conducted  and  to  change  its  name; 
the  resolutions  to  vacate  the  old  site  and  to  sell  or  rent  it  were  matters 
of  congregational  competence,  and  were  conclusive  as  against  the  plain- 
tiffs. The  identity  of  the  beneficiary  church  was  established  in  favour 
of  the  body  represented  by  the  defendants;  and  such  of  the  plaintiffs 
and  those  whom  they  represented  as  were  members  of  the  original 
body,  had,  by  leaving  it,  ceased  to  be  a part  of  it,  and  had  no  right  as 
former  members  to  claim  any  part  of  the  trust  property. 

Held,  also,  that  the  plaintiff  H.,  although  in  good  standing  as  a minister 
of  the  general  body,  was  not  one  “duly  authorised  by  the  said  Evan- 
gelical Lutheran  Church  to  conduct  the  worship  thereof:”  the  context 
shewed  that  the  source  of  authority  was  to  be  sought,  not  in  the  de- 
nomination at  large,  but  in  the  particular  body  or  church  representing 
the  original  congregation. 

Held,  also,  that  no  amendment  enabling  the  plaintiffs  to  sue  on  behalf  of 
others  who  sympathised  with  them — which  was  essential  in  order  that 
no  incongruity  in  the  class  represented  might  arise — would  better  the 
cause  of  action;  the  legal  title  was  in  the  defendants,  and  no  breach  of 
trust  had  arisen  in  regard  to  which  the  plaintiffs  had  a right  or  an  in- 
terest to  complain. 

Semble,  that  the  defendants’  breaches  of  trust  might  be  investigated  by  the 
intervention  of  the  Attorney-General  and  a competent  relator. 

Action  for  a mandatory  injunction  requiring  the  defend- 
ants, the  trustees  of  an  Evangelical  Lutheran  Church  in  the  town 
of  Stratford,  to  reopen  for  public  worship  their  disused  church- 
edifice,  and  to  allow  the  plaintiff  Huegli  to  conduct  services 
therein;  for  a declaration  that  the  plaintiffs  were  entitled  to 
have  the  trusts  of  the  deed  of  the  land  upon  which  the  building 
stood  carried  into  execution;  for  an  injunction  restraining  the 


defendants  from  leasing  or  selling  the  building  or  the  land  and 


from  using  or  allowing  it  to  be  used  for  purposes  other  than 
those  declared  in  the  trust  deed;  and  for  other  relief. 


March  20  and  21.  The  action  was  tried  before  Boyd,  C., 
without  a jury,  at  Stratford. 

F.  H.  Thompson , K.C.,  for  the  plaintiffs. 

R.  S.  Robertson,  for  the  defendants. 

March  27.  Boyd,  C. : — This  is  a church  case,  not  involving 
questions  of  doctrine,  but  only  those  of  property.  All  the  liti- 
gants are  of  the  Evangelical  Lutheran  denomination,  holding 
the  doctrines  set  forth  in  the  unaltered  Augsburg  Confession, 
and  both  parties  claim  conflicting  rights  under  one  and  the  same 
deed  of  trust. 

The  plaintiffs’  statement  of  case  appears  simple;  but,  upon 


XXVI.  ] 


ONTARIO  LAW  REPORTS. 


97 


the  development  of  the  facts  at  the  trial,  questions  arise  of 
difficult  and  complicated  character  which  have  not  been  con- 
sidered by  our  Courts.  I do  not  purpose  to  deal  with  more  than 
are  necessary  to  determine  this  action.  Three  plaintiffs  are  on 
the  record,  but  at  the  hearing  they  asked  leave  to  sue  ‘ ‘ on  behalf 
of  others.”  An  initial  difficulty  arises  as  to  “who  are  the 
others?”  That  remains  as  yet  undefined.  The  defendants  are 
alleged  to  be  and  are  the  trustees  of  the  legal  estate  in  the 
church  property  in  question,  and  breaches  of  trust  are  com- 
plained of.  No  doubt,  the  rule  is  well  settled  that  a member  of 
the  society  may  sue  on  behalf  of  himself  and  all  the  members  of 
that  society  to  prevent  a breach  of  trust ; or  it  may  be  that,  if 
he  stands  alone,  he  may  sue  in  his  own  name  for  an  injunction ; 
but  it  must  appear  that  he  has  a legal  interest  to  intervene.  So 
I pass  for  the  present  from  the  question  of  parties  and  the 
locus  standi  of  the  plaintiffs. 

The  trust  property  was  acquired  in  July,  1874,  by  convey- 
ance in  fee  simple  from  Alexander  Grant,  of  Stratford,  for  an 
expressed  consideration  of  $200.  The  conveyance  is  made  to 
three  persons  appointed  to  be  trustees  (under  the  statute  then 
in  force,  36  Yict.  ch.  135(0.),  respecting  the  property  of  religi- 
ous institutions),  for  the  purposes  therein  set  forth.  The  recitals 
shew  that  a then  existing  religious  society  or  congregation  of 
Evangelical  Lutherans  had  occasion  for  the  land  purchased  and 
conveyed  as  a site  for  a house  of  public  worship,  and  had  ap- 
pointed three  persons  to  hold  in  perpetual  succession,  under  the 
name  of  “The  Trustees  of  the  Stratford  Evangelical  Lutheran 
Church,”  for  the  use  of  the  said  society  and  upon  the  trusts 
thereinafter  set  forth. 

There  are  two  “special  trusts”  (to  use  the  phrase  of  the 
deed)  : first,  that  the  premises  shall  be  forever  hereafter  held 
for  the  use  of  the  members  of  an  Evangelical  Lutheran  Church, 
which  shall  be  exclusively  composed  of  persons  holding  the 
doctrines  of  the  said  Augsburg  Confession;  and,  second,  “that 
the  trustees  shall  at  all  times  hereafter  permit  any  minister,  he 
being  duly  authorised  by  the  said  Evangelical  Lutheran  Church 
to  conduct  the  worship  thereof,  to  officiate  in  the  church  existing 
or  which  may  hereafter  be  built  on  the  said  lot  according  to 


Boyd,  c. 

1912 

Huegli 

V. 

Pauli 


1 — XXVI.  O.L.R. 


98 


ONTARIO  LAW  REPORTS. 


Boyd,  C, 

1912 

Huegli 

V. 

Pauli 


— — ^ uing.  [VOL. 

the  ritual  ...  of  the  said  Church,  and  shall  also  apply  the 
rents  and  profits  derived  from  any  portion  of  the  said  lot  or 
the  buildings  erected  thereon  towards  the  maintenance  of  public 
worship  in  the  said  church  or  meeting-house  according  to  the 
rules  ...  or  towards  the  repairs  or  improvement  of  the 
said  property,  and  to  no  other  purpose  whatsoever.  ’ ’ 

It  is  to  be  noted  that  the  word  “ church  ” is  used  in  two 
senses  in  different  parts  of  the  conveyance,;  at  times  referring  to 
the  religious  society,  and  again  to  the  particular  meeting-house 
on  the  premises. 

The  recitals  shew  that  the  conveyance  was  obtained  under 
the  powers  conferred  upon  religious  societies  by  the  provincial 
statute  then  in  force,  36  Viet.  ch.  135,  sec.  19,  which  provides 
that  “in  every  case  the  special  trusts  or  powers  of  trustees 
contained  in  any  deed,  conveyance,  or  other  instrument,  shall 
not  be  affected  or  varied  by  any  of  the  provisions  of  this  Act.” 
That  clause  is  carried  into  the  latest  revision  of  the  same  Act 
(R.S.O.  1897,  ch.  307,  sec.  23).  This  Act  gives  power  to  sell  the 
land  when  it  becomes  unnecessary  to  be  held  for  the  religious 
use  of  the  congregation,  and  it  is  deemed  advantageous  to  sell, 
etc. : sec.  7 of  36  Viet.  ch.  135. 

This  original  society  built  and  took  possession  of  a meeting- 
house on  the  said  land,  and  occupied  the  place  for  religious  uses 
down  to  the  13th  December,  1908,  when  the  premises  were 
vacated  under  the  following  circumstances. 

The  congregation  was  growing  from  year  to  year,  and  it 
became  a question  whether  the  old  building  should  be  repaired 
and  extended  or  another  site  should  be  procured  and  a new 
building  erected. 

By  the  record  in  the  church  minutes  it  was,  on  the  17th 
December,  1906,  resolved  unanimously  that  a new  church 
should  be  erected.  There  was  some  fluctuation  of  opinions  and 
of  resolutions  as  to  the  locus ; but  finally  it  was  moved  and 
carried  at  a meeting  of  the  congregation  held  on  the  24th  Janu- 
ary, 1908,  that  a new  lot  should  be  bought,  and  on  the  28th 
August  of  the  same  year  that  the  old  lot  should  be  sold.  This 
vote  also  appears  to  be  practically  unanimous,  only  one  person 
(who  is  one  of  the  plaintiffs,  Allstadt)  voting  “nay.” 

The  new  building  being  put  up  on  the  new  lot,  the  congrega- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


99 


tion  as  a whole  took  possession  of  the  new  building,  in  Erie 
street,  on  the  13th  December,  1908,  when  the  new  meeting- 
house was  formally  opened.  There  does  not  appear  to  have  been 
what  is  called  a “split”  in  the  society.  Some  members  may 
have  been  reluctant  or  inert,  but  only  the  one  who  voted  “navM 
upon  the  question  of  sale  is  in  evidence  as  being  actively  dis- 
sident. The  pastor  of  the  society  that  moved  into  the  new  build- 
ing says,  “Practically  the  whole  congregation  went  with  me.” 
He  names  the  plaintiff  Allstadt  as  the  only  exception.  Another 
plaintiff,  Racey,  was  active  in  support  of  the  new  movement, 
and  voted  in  favour  of  it  at  the  meeting. 

After  vacating  the  old  site,  the  trustees,  acting  on  the 
direction  of  the  congregation,  rented  the  building  thereon,  and 
applied  the  surplus  of  rent,  after  paying  taxes  and  insurance, 
for  the  benefit  of  the  congregation  and  of  the  new  site.  The 
trustees  also,  in  like  manner,  sold  four  feet  of  the  land,  and  are 
now  offering  the  rest  for  sale.  The  trustees  of  the  Erie  street 
lot  (now  defendants)  claim  to  be  the  legal  owners  of  the  old 
site;  and  this  is  not  in  effect  questioned  by  the  plaintiffs  in 
the  present  case.  The  object  of  the  suit  is  to  restrain  the  sale 
and  to  get  a right  of  entrance  to  the  old  building  (which  is  in 
Cambria  street)  in  order  to  make  use  of  it  for  religious  services, 
in  the  interest  of  a body  of  people  represented  by  the  plain- 
tiffs. This  movement  in  regard  to  the  new  body  began  in  Febru- 
ary, 1911,  by  the  forwarding  of  a petition  with  twelve  signa- 
tures to  the  plaintiff  Huegli,  who  is  an  Evangelical  Lutheran 
clergyman  of  the  Synod  of  Missouri,  and  in  good  standing  as  a 
member  of  that  iSynod,  inviting  him  to  take  up  ministerial  work 
in  Stratford.  He  came,  and  a hall  was  rented  On  Downey 
street,  and  there  he  began  to  organise  a congregation,  and  was 
joined  by  the  plaintiffs  Racey  and  Allstadt  and  two  or  three 
others  who  had  been  members  of  the  congregation  worshipping 
in  Cambria  street,  and  also  by  some  outsiders,  aggregating  in  all 
about  twenty  members — the  whole  number  of  present  adherents 
in  Downey  street  hall  being  about  one  hundred. 

To  go  back  now  to  an  analysis  of  the  petitioners  and  their 
standing  in  the  Cambria  street  church  at  the  time  it  was  re- 
solved to  build  a new  meeting-house  on  another  site,  we  find 


Boyd,  C. 

1912 

Huegli 

v. 

Pauli 


100 


ONTARIO  LAW  REPORTS. 


Boyd,  C. 

1912 

Huegli 

V. 

Pauli 


[VOL. 

that  five  of  these  were  not  members  of  the  old  church ; one,  Hem- 
bruch,  was  not  in  good  standing  since  1906,  and  had  no  right  to 
vote  in  the  old  church;  and  of  the  remaining  six,  Homan  at- 
tended the  Erie  street  meetings  for  a while;  Schroeder  sub- 
scribed for  the  building  of  the  new  church,  and  became  liable  on 
the  bond  for  its  debt,  and  also  attended  at  Erie  street  for  a 
while;  Wolf  subscribed  towards  the  new  building  and  went  over 
with  the  majority;  Redding  is  now  a member  of  the  Erie  street 
church  and  in  good  standing  (i.e.,  making  his  payments,  etc.)  ; 
Racey  went  over  with  the  rest  to  Erie  street  church,  and,  as 
has  been  stated,  was  an  active  advocate  of  the  change ; and  the 
last  of  the  twelve,  Allstadt,  is  the  only  one  who  has  opposed 
and  stood  aloof  from  the  new  movement. 

The  situation  as  it  has  been  developed  is  not  provided  for 
in  the  four  corners  of  the  deed  of  trust.  Only  two  conditions 
are  there  dealt  with:  (1)  when  all  is  going  on  in  due  course  by 
the  occupation  and  religious  use  of  the  trust  property  by  the 
congregation  of  the  Stratford  Evangelical  Lutheran  Church;  and 
(2)  when  the  church  for  which  the  “ trust  was  created  shall  lose 
its  visibility  and  cease  to  exist” — then  the  control  of  the  pro- 
perty is  to  pass  over  to  and  vest  in  the  nearest  Evangelical 
Lutheran  Church  of  the  same  faith  and  order. 

The  action  is  framed  on  the  theory  that  this  second  situa- 
tion has  arisen — by  assuming  that  the  vacating  of  the  old  site 
is  equivalent  to  the  cesser  of  existence  of  the  beneficiary.  This 
proposition  cannot,  it  seems  to  me,  be  sustained.  The  church 
in  possession  under  the  deed  of  trust  has,  for  sufficient  reasons, 
decided  no  longer  to  remain  on  the  trust  property ; and  the  ques- 
tion as  to  what  is  to  be  done  with  that  property  cannot  be  solved 
by  reference  to  this  latter  provision  in  the  deed  of  trust. 

The  newly  organised  body,  containing  a few  members  of 
the  former  church  society,  has  applied  for  leave  to  enter  upon 
the  old  site,  by  notice  about  the  12th  April,  1911;  and,  failing 
to  get  satisfaction,  this  action  is  brought  on  the  1st  February, 
1912,  seeking  a mandatory  order  on  the  defendants  to  enforce 
the  reopening  of  the  church  and  to  allow  the  plaintiff  Huegli  to 
conduct  public  worship  therein,  and  for  a declaration  to  have 
the  trusts  of  the  deed  carried  into  execution,  and  to  have  the 
sale  stayed  and  the  rents  applied  under  the  trust  to  the  old  site. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


101 


By  the  terms  of  the  deed,  the  land  is  held  on  the  special 
trusts  that  the  same  shall  be  forever  held  and  enjoyed  for  the 
use  of  the  members  of  an  Evangelical  Lutheran  Church,  and 
that  the  rents,  etc.,  shall  be  applied  to  repairs  and  improve- 
ment of  the  said  property,  and  to  no  other  purpose  whatsoever. 

The  plaintiffs’  broad  contention  is,  that  the  lands  cannot  be 
sold  and  that  the  rents  (if  any)  cannot  be  diverted  from  the 
perpetual  purpose  of  repairing  and  improving  the  trust  pro- 
perty. They  claim  to  represent  some  of  the  beneficiaries,  being 
members  of  the  original  congregation  for  whose  use  and  benefit 
the  trust  was  created,  and  that  the  majority  cannot  by  any  vote 
or  action  overrule  and  extinguish  their  rights  and  claims. 

The  broad  contention  of  the  defence  is,  that  there  is  no  pri- 
vate right  of  action;  that  the  beneficiary  is  the  society  or  con- 
gregation, and  not  any  individuals  of  it ; and  that  the  society  as 
a whole  is  represented  by  the  Erie  street  church.  As  to  the 
sale  and  the  application  of  the  rents,  they  invoke  the  benefit  of 
the  statute  referred  to  in  the  deed;  and  say  that,  even  if  the 
rents  were  misapplied,  it  is  a grievance  to  be  complained  of 
by  the  Attorney-General,  and  not  by  the  plaintiffs. 

This  Act,  no  doubt,  provides  for  the  sale  and  leasing  of  church 
lands  when  it  becomes  unnecessary  to  retain  them  for  religious 
use,  upon  the  consent  being  obtained  of  a majority  of  the 
members  present  at  a meeting  duly  called  for  that  purpose ; 
and,  so  far  as  all  necessary  preliminaries  are  concerned,  this 
place  may  well  be  sold  or  leased  if  the  Act  applies.  But  the 
plaintiffs  rely  on  sec.  19  of  the  Act  (sec.  23  of  the  present  Act), 
which  provides  that  in  every  case  the  special  trusts  or  powers  of 
trustees  contained  in  any  deed  shall  not  be  affected  or  varied 
by  any  of  the  provisions  of  the  Act.  In  this  deed  we  find  ex- 
pressed as  “ special  trusts:”  (1)  that  the  land  shall  be  forever 
hereafter  held  and  enjoyed  for  the  use  of  the  members  of  an 
Evangelical  Lutheran  Church;  and  (2)  that  the  rents  and  profits 
derived  from  any  portion  of  the  said  parcel  of  ground  or  the 
building  erected  thereon  shall  be  applied  towards  the  mainten- 
ance of  public  worship  in  the  said  church  or  meeting-house,  to- 
wards the  repairs  and  improvement  of  the  said  property,  and 
for  no  other  purpose  whatsoever.  This  last  special  trust  is 


Boyd,  C, 

1912 

Huegli 

V . 

Pauli 


102 

Boyd,  C. 

1912 

Huegli 

V. 

Pauli 


ONTARIO  LAW  REPORTS.  [vol. 

peculiarly  emphatic  in  being  impressed  on  the  very  place  and 
the  building  (the  meeting-house)  thereon. 

Unless  I can  nullify  these  special  trusts,  the  land  cannot 
be  sold  or  the  rents  diverted  to  another  place.  And,  as  I read 
the  statute,  it  forbids  the  nullification  of  these  special  trusts. 
The  effect  of  this  statute  has  not  been  considered;  I believe,  by 
the  Courts  in  the  aspect  now  presented.  The  aim  of  the  Legis- 
lature appears  to  be  to  give  a right  of  alienation  to  a religious 
body  holding  lands  by  trustees  capable  of  perpetual  succession. 
The  statute  leaves  out  cases  of  special  trust  and  deals  with 
lands  held  by  the  corporation  on  the  general  trust  or  obligation 
of  using  the  property  for  the  purposes  contemplated  at  its 
creation. 

Apart  from  special  restraining  trusts,  when  the  body 
outgrows  its  building,  and  the  majority  decide  that  it  has  become 
necessary  and  advantageous  to  dispose  of  the  property  with  a 
view  of  removing  to  a more  convenient  situation,  then  the 
statute  promotes  the  benefit  of  the  body  by  sanctioning  such  a 
course ; and  a sale  so  had,  which  is  a conversion  of  the  present 
property,  cannot  be  regarded  as  a diversion  or  a breach  of  trust. 

But,  if  words  are  found  in  the  conveyance  which  forbid  a 
change  of  site,  the  statute  does  not  mean  to  violate  that  term  of 
the  contract,  but  lets  the  parties  abide  by  the  bargain  they 
have  made  when  the  property  was  acquired.  By  the  terms  of 
this  deed,  the  land  is  bought  for  the  possessory  use  and  benefit 
of  the  particular  local  church  as  a congregation,  and  is  to  be 
maintained  and  improved  in  perpetuity.  The  rents  and  profits, 
if  any,  are  to  be  invested  in  the  meeting-house  and  otherwise 
on  the  particular  site ; the  congregation  is  tied  down  to  that  spot 
as  their  place  of  worship  so  long  as  the  congregation  exists.  In 
brief,  the  trust  inheres  in  the  title,  and  so  passes  to  the  succes- 
sive trustees  indefinitely  in  future > — not  to  be  interrupted  by  a 
sale  out  and  out.  This  is  my  reading  of  the  statute  and  of  this 
trust  deed — but  the  result  does  not  enure  to  the  benefit  of  the 
plaintiffs. 

Now  the  present  trustees,  the  defendants,  hold  this  land 
in  trust  for  the  particular  church  so  long  as  it  exists  and  can  be 
traced  and  identified.  The  Stratford  Evangelical  Lutheran 


XXVI.] 


ONTARIO  LAW  REPORTS. 


103 


Church  of  the  deed  had  power  to  change  the  place  at  which  its 
services  should  be  conducted  and  also  to  change  its  name  to  that 
of  the  “Erie  Street  Church.”  These  changes  of  local  habitation 
and  name  are  matters  of  ecclesiastical  concern  and  cognizance, 
with  which  the  Courts  have  nothing  to  do.  The  organisation 
of  this  particular  church  is  based  on  the  Independent  or  Con- 
gregational system,  in  which  the  voice  of  the  majority  of  the 
members  prevails.  The  minority,  however  small  or  large,  is  out- 
voted by  the  action  of  the  majority,  and  the  resolutions  to  vacate 
the  old  place,  to  sell  or  rent  it,  and  to  move  into  a new  building 
on  a new  site,  are  all  matters  of  congregational  competence,  and 
are  conclusively  settled  as  against  the  plaintiffs.  The  identity  of 
the  beneficiary  church  is  established  in  favour  of  the  body  repre- 
sented by  the  trustees,  the  defendants.  The  few  who  went  out 
and  banded  themselves  together  with  others  in  a new  organisa- 
tion, worshipping  in  the  Downey  street  hall,  are  an  offshoot 
from  the  old  body,  but  thereby  have  ceased  to  be  a part  of  it, 
and  can  have  no  right  as  once  members  of  the  original  body  to 
claim  any  part  of  the  property  vested  in  *the  trustees  for  that 
original  body:  see  per  Dickerson,  J.,  in  Newburgh  Associate  Re- 
formed Church  Trustees  v.  Princeton  Theological  Seminary 
Trustees  (1837),  4 N.J.  Eq.  77,  and  Pine  Hill  Lutheran  Con- 
gregation Trustees  v.  St.  Michael’s  Evangelical  Church  of  Pine 
Hill  (1864),  48  Pa.  St.  20. 

That  appears  to  be  the  situation  as  regards  the  religious  or 
ecclesiastical  aspect  of  this  controversy.  None  of  the  plaintiffs  is 
a corporator  or  beneficiary  because  not  a member  of  the  old 
church.  But  that  leaves  untouched  the  consequences  of  this 
congregational  act  of  removal  in  a legal  point  of  view,  as  affected 
by  the  legal  breaches  of  trust  begun  in  part  and  in  process  of 
consummation  by  the  sale  of  the  land. 

It  may  be  well  now  to  deal  with  the  plaintiff  Huegli,  who  is 
an  outsider  (so  to  speak)  and  stands  alone  in  his  claim.  Assum- 
ing the  non-existence  of  the  church,  the  plaintiffs  invoke  that 
part  of  the  deed  which  provides  that,  if  the  church  loses  its 
visibility,  the  land  forthwith  vests  in  the  trustees  of  the  nearest 
Evangelical  Lutheran  Church,  which  in  this  case  happens  to  be 
the  Erie  Street  Church,  and  the  defendants  the  trustees.  If 


Boyd,  0. 

1912 

Huegli 

v. 

Pauli 


104 

Boyd,  C. 

1912 

Huegli 

V. 

Pauli 


ONTARIO  LAW  REPORTS.  [vol. 

so  vested  with  the  land  in  this  character,  the  deed  provides  that 
the  trustees  shall  be  under  obligation  to  open  the  church  for 
regular  or  occasional  services  to  any  minister  or  missionary  of 
the  Evangelical  Lutheran  denomination  holding  the  doctrinal 
views  of  the  Augsburg  Confession  aforesaid.  This  requirement 
is  fulfilled  by  Mr.  Huegli,  who  is  in  good  standing  as  a member 
of  the  Synod  of  Missouri,  and  is  presented  by  the  newly  organ- 
ised church  on  Downey  street  as  a fit  and  proper  person  to  be 
inducted  for  the  time  being  in  connection  with  the  services  to 
be  resumed  on  the  site  owned  by  the  defendants.  The  differ- 
ence between  this  part  of  the  trust  and  that  which  relates  to 
the  regular  services  held  when  the  building  is  occupied  by  the 
original  church  is,  that  in  the  latter  case  the  clergyman  who  has 
the  right  of  entree  is  one  “duly  authorised  by  the  said  Evange- 
lical Lutheran  Church  to  conduct  the  worship  thereof.  ” The 
context  shews  that  the  source  of  authority  is  to  be  sought,  not  in 
the  denomination  at  large,  extending  over  the  continent,  but  in 
the  particular  body  or  church  representing  the  original  con- 
gregation. There  being  no  lack  of  existence  or  of  visibility  of 
this  latter  body,  the  plaintiff  Huegli  is  a clergyman  not 
competent  to  officiate,  whose  claim  to  conduct  the  services  in 
the  old  building  may  well  be  vetoed  by  the  trustees.  So  that, 
to  put  it  shortly,  the  plaintiffs,  who  complain  of  a breach  of 
trust  by  the  trustees,  propose  to  enforce  against  them  an  occu- 
pancy of  the  site  which  would  be  a further  breach  of  trust. 
Upon  the  ecclesiastical  side,  the  old  church  body  worshipping 
close  by  in  Erie  street  regards  this  move  as  an  attempt  to  estab- 
lish a rival  church  in  their  proximity  for  no  sufficient  cause. 

No  amendment  enabling  the  plaintiffs  to  sue  on  behalf  of 
others  who  sympathise  with  them — and  this  is  essential  in  order 
that  no  incongruity  in  the  class  represented  may  arise — no  such 
amendment  would  better  the  cause  of  action.  The  legal  title  is 
in  the  defendants,  and  no  breach  of  trust  has  arisen  in  regard  to 
which  the  plaintiffs  had  a right  or  an  interest  to  complain.  The 
breaches  of  trust  must  be  investigated  by  another  method,  pro- 
bably by  the  intervention  of  the  Attorney-General  and  a com- 
petent relator;  but  on  that  I do  not  decide.  The  only  possible 
way  of  reparation  to  cure  the  breaches  would  be  for  the  Zion 


XXVI.] 


ONTARIO  LAW  REPORTS. 


105 


Church  to  retrace  their  steps,  resume  possession,  and  re-estab- 
lish worship  on  the  old  site ; but  I suppose  it  is  now  too  late  for 
that  remedy.  It  may  be  that  the  real  solution  of  the  difficulty  is 
to  resort  to  the  Legislature  and  procure  special  legislation, 
which  may  quiet,  if  not  satisfy,  all  concerned. 

The  action  must  be  dismissed;  but  costs  will  not  be  given, 
considering  that  the  question  discussed  is  new  and  bare  of  prece- 
dent, and  that  the  conduct  of  the  defendants  has  not  been  ac- 
cording to  law,  however  honestly  undertaken. 


[TEETZEL,  J.] 

Kennedy  v.  Kennedy. 

Will — Construction — Gift  for  Maintenance  of  Residence — Perpetuity — In- 
testacy— Trust — Discretion  of  Trustees — Bona  Fides — Power  to  Sell 
Lands — Conveyance  Free  from  Charge  of  Annuity — Charge  on  Proceeds 
of  Sale. 

Any  gift,  not  being  charitable,  the  object  of  which  is  to  tie  up  property  for 
an  indefinite  time,  is  void. 

The  testator  devised  his  dwelling-house  and  lands  and  the  chattels  therein 
and  thereon  (except  a number  specifically  bequeathed)  to  his  son,  the 
defendant  J.  H.  K.,  but  subject  to  certain  provisions  as  to  rights  of  occu- 
pation, etc.,  in  favour  of  two  granddaughters.  He  made  other  bequests; 
and  then  gave  the  residue  of  his  estate  to  his  executors  and  trustees  “to 
be  used  and  employed  by  them  in  their  discretion  or  in  the  discretion  of 
a majority  of  them  in  so  far  as  it  may  go  to  the  maintenance  and  keep- 
ing up  my  house  and  premises  herein  bequeathed  to  my  son  J.  H.  K. 
with  full  power  and  authority  to  them  to  make  sales  of  any  real  estate 
upon  such  terms  and  conditions  and  otherwise  as  may  be  expedient  and 
to  execute  all  deeds  documents  and  other  papers  necessary  for  the  sale 
of  same  and  to  make  title  thereto  to  any  purchaser  thereof  and  the  pro- 
ceeds of  such  sales  to  devote  as  in  their  discretion  or  in  the  discretion 
of  a majority  of  them  may  seem  meet  and  necessary  to  keep  up  and 
maintain  my  said  residence  in  the  manner  in  which  it  has  been  hereto- 
fore kept  and  maintained  and  if  for  any  reason  it  should  be  necessary 
that  the  said  residence  should  be  sold  and  disposed  of  I direct  upon  any 
such  sale  being  completed  that  the  residuary  estate  then  remaining  shall 
be  divided  in  equal  proportions  among  the  several  pecuniary  legatees 
under  this  my  will:”' — 

Held,  that  the  gift  of  the  residue  was  void  as  creating  or  tending  to  create 
a perpetuity;  and  that  there  was  an  intestacy  as  to  the  whole  of  the  resi- 
due. 

Thomson  v.  Shakespear  (1860),  1 De  G.  F.  & J.  399,  Came  v.  Long  (1860), 
2 De  G.  F.  & J.  75,  Yeap  Cheah  Neo  v.  Ong  Cheng  Neo  (1875),  L.R.  6 
P.C.  381,  and  Rickard  v.  Rohson  (1862),  31  Beav.  244,  applied  and  fol- 
lowed. 

Semble,  that,  although  the  trust  was  in  its  nature  imperative,  and  the 
amount  to  be  expended  was  left  in  the  discretion  of  the  trustees,  they 
could  not  at  once  appropriate  the  whole  fund,  regardless  of  the  amount 
thereof  and  the  amount  necessary  to  be  expended,  for  the  benefit  of  the 
owner  of  the  dwelling-house,  the  defendant  J.  H.  K. ; the  trust  must  be 
executed  in  good  faith. 

8 — XXVI.  O.L.R. 


Boyd,  C. 

1912 

Huegli 

v. 

Pauli 


$ 

1912 

March  28. 


106 


ONTARIO  LAW  REPORTS. 


1912 

Kennedy 

15. 

Kennedy. 


[you 


Held,  also,  that  the  wide  power  of  sale  vested  in  the  trustees  enabled  them 
to  make  title  to  lands  embraced  in  the  gift  of  the  residue  free  from  a 
charge  of  an  annuity  thereon  in  favour  of  the  plaintiff;  but  the  proceeds 
of  sale  would  be  subject  to  the  charge. 

The  plaintiff,  one  of  the  next  of  kin  of  David  Kennedy,  de- 
ceased, brought  this  action  to  obtain  a construction  of  the  will  of 
the  deceased,  and  for  a declaration  that  the  gift  therein  to  the 
trustees  to  keep  up  and  maintain  the  residence  of  the  testator 
was  void  as  tending  to  create  a perpetuity. 

March  5.  The  action  was  tried  before  Teetzel,  J.,  without 
a jury,  at  Toronto. 

J.  Bicknell,  K.C.,  and  W.  A.  Baird,  for  the  plaintiff  and  the 
defendants  Robert  Kennedy  and  Joseph  H.  Kennedy. 

E.  D.  Armour,  K.C.,  and  A.  D.  Armour,  for  the  defendant 
James  H.  Kennedy. 

W.  M.  Douglas,  K.C.,  for  the  defendants  the  Suydam  Realty 
Company  and  Henry  Suydam. 

T.  P.  Galt,  K.C.,  A.  J.  Bussell  Snow,  K.C.,  and  W.  A.  Proud- 
foot,  for  the  other  defendants. 


March  28.  Teetzel,  J. : — The  principal  question  for  deter- 
mination is,  whether  or  not  a provision  contained  in  the  will  of 
David  Kennedy,  deceased,  is  good,  or  void  as  creating  or  tending 
to  create  a perpetuity. 

The  clause  containing  the  provision  in  question  reads  as 
follows : — 

‘ ‘ The  rest  residue  and  remainder  of  my  estate  both  real  and 
personal  I give  devise  and  bequeath  to  my  executor  executrices 
and  trustees  aforesaid  to  be  used  and  employed  by  them  in  their 
discretion  or  in  the  discretion  of  a majority  of  them  in  so  far 
as  it  may  go  to  the  maintenance  and  keeping  up  my  house  and 
premises  herein  bequeathed  to  my  son  James  Harold  Kennedy 
with  full  power  and  authority  to  them  to  makes  sales  of  any  real 
estate  upon  such  terms  and  conditions  and  otherwise  as  may 
be  expedient  and  to  execute  all  deeds  documents  and  other 
papers  necessary  for  the  sale  of  same  and  to  make  title  thereto 
to  any  purchaser  thereof  and  the  proceeds  of  such  sales  to  de- 
vote as  in  their  discretion  or  in  the  discretion  of  a majority  of 
them  may  seem  meet  and  necessary  to  keep  up  and  maintain  my 


XXVI.] 


ONTARIO  LAW  REPORTS. 


107 


said  residence  in  the  manner  in  which  it  has  been  heretofore 
kept  and  maintained  and  if  for  any  reason  it  should  be  necessary 
that  the  said  residence  should  be  sold  and  disposed  of  I direct 
upon  any  such  sale  being  completed  that  the  residuary  estate 
then  remaining  shall  be  divided  in  equal  proportions  among  the 
several  pecuniary  legatees  under  this  my  will.  ’ ’ 

This  clause  and  other  parts  of  the  will  have  been  the  subject 
of  much  judicial  consideration  during  the  last  three  years,  be- 
ginning with  Kennedy  v.  Kennedy  (1909),  13  O.W.R.  984,  and 
in  Kennedy  v.  Kennedy  (1911),  24  O.L.R.  183,  and  Foxwell  v. 
Kennedy  (1911),  24  O.L.R.  189;  the  last  pronouncement  being 
an  unreported  judgment  of  the  Chief  Justice  of  the  Common 
Pleas,  in  January  last,  in  Foxwell  v.  Kennedy,  on  the  counter- 
claim of  the  defendants  the  Suydam  Realty  Company  and  Henry 
Suydam,  decreeing  in  their  favour  specific  performance  of  a 
contract  for  the  sale  of  a portion  of  the  residuary  estate  in  con- 
sideration of  $97,000.* 

By  the  judgment  in  Kennedy  v.  Kennedy,  reported  in  24 
O.L.R.  183,  it  was  held  by  Mr.  Justice  Latchford  that  the  pro- 
vision in  the  above  clause  in  favour  of  the  pecuniary  legatees  was 
void,  on  the  ground  that  it  created  a perpetuity.  This  judgment 
was  affirmed  by  a Divisional  Court  (p.  189  of  the  same  volume)  ; 
and  a judgment  of  mine  in  Foxwell  v.  Kennedy,  formally  adopt- 
ing the  judgment  of  my  brother  Latchford,  was  affirmed  by  a 
Divisional  Court  (p.  198  of  the  same  volume). 

The  plaintiff  is  one  of  the  next  of  kin  of  the  testator,  and  in 
this  action  claims,  not  only  that  the  gift  of  what  may  remain 
of  the  residuary  estate,  but  also  that  the  gift  in  its  entirety  to 
the  trustees  to  keep  up  and  maintain  the  residence  of  the  testa- 
tor, is  void  as  tending  to  create  a perpetuity. 

The  testator  gives  his  dwelling-house  and  premises  in  the 
city  of  Toronto,  together  with  the  chattels  therein  or  thereon 
at  the  time  of  his  decease,  except  a number  specifically  be- 
queathed, to  the  defendant  James  Harold  Kennedy,  “but  sub- 
ject nevertheless  to  the  provisions  hereinafter  made  for  Gertrude 
Maude  Foxwell  and  Annie  Maud  Hamilton.” 

*An  appeal  from  this  judgment  was  dismissed  by  a Divisional  Court 
on  the  6th  May  1912.  See  3 O.W.K.  1225. 


Teetzel,  J. 

1912 

Kennedy 

v. 

Kennedy. 


108 


ONTARIO  LAW  REPORTS. 


Teetzel,  J. 

1912 

Kennedy 

v. 

Kennedy. 


[VOL. 

The  will  contains  provisions  in  favour  of  each  of  these 
ladies,  to  the  effect  that  each  is  given  a bed-room  suite  in  a 
specified  room  in  the  house,  together  with  the  contents  and  fur- 
nishings thereof,  with  a right  to  live  in  said  residence  as  a home 
as  long  as  she  remains  unmarried,  and  to  occupy  said  room  with 
free  and  full  ingress,  egress,  and  regress  thereto  and  therefrom, 
with  all  other  privileges,  rights,  conditions,  and  conveniences 
necessary  to  the  full  enjoyment  thereof,  but  on  no  condition  is 
she  to  be  looked  upon  to  do  or  to  be  compelled  to  do  any  work  or 
have  any  household  duties  or  responsibilities  except  to  look 
after  her  own  apartment,  and  a right  to  remove  the  chattels 
when  she  leaves  the  premises;  and  his  son  James  Harold  Ken- 
nedy is  to  supply  her  with  a key  to  the  front  door,  with  all  neces- 
sary maintenance  and  board,  all  of  which  is  expressly  made  a 
charge  upon  his  residence  and  premises. 

I think  it  is  plain  from  all  the  provisions  of  the  will  with 
reference  to  his  residence  that  the  testator’s  scheme  was  to  have 
the  same  maintained  as  a family  residence  for  these  two  young 
ladies  as  long  as  they  lived  and  for  his  son  James  Harold  Ken- 
nedy and  his  family  and  descendants  or  whomsoever  James 
Harold  Kennedy  might  will  or  otherwise  give  the  said  residence 
to,  and  that  as  to  such  residence  it  should,  until  sold  and  disposed 
of,  be  kept  up  and  maintained  by  the  trustees  and  those  succeed- 
ing them  in  the  trust  in  the  manner  in  which  it  had  been  kept  up 
and  maintained  by  him. 

This  being,  as  I think,  the  scheme  which  the  testator  had 
in  his  mind,  the  question  for  consideration  is,  whether,  in  making 
the  provision  for  carrying  out  that  scheme,  he  has  not  infringed 
the  rule  of  law  against  perpetuities. 

As  the  result  of  the  best  consideration  I have  been  able  to 
give  to  the  numerous  authorities  cited  in  argument  and  others, 
I am  of  opinion  that  the  gift  in  question  is  void  as  creating  or 
tending  to  create  a perpetuity.  I am  unable  to  distinguish  this 
case  in  principle  from  such  cases  as  Thomson  v.  Shakespear 
(1860),  1 DeG.  P.  & J.  399;  Came  v.  Long  (1860),  2 DeG.  F.  & 
J.  75;  Yeap  Cheah  Neo  v.  Ong  Cheng  Neo  (1875),  L.R.  6 P.C. 
381;  and  Rickard  v.  Robson  (1862),  31  Beav.  244. 


■ 


XXVI.] 


ONTARIO  LAW  REPORTS. 


109 


In  Thomson  v.  Shakespear,  the  provision  of  the  will  analog- 
ous to  the  provision  in  question  was,  that  the  testator  gave  his 
trustees  £2,500  “to  he  laid  out  by  them  as  they  shall  think  fit, 
with  the  concurrence  of  the  trustees  of  Shakspeare’s  house, 
already  sanctioned  by  me,  in  forming  a museum  at  Shakspeare ’s 
house,  in  Stratford,  and  for  such  other  purposes  as  my  said 
trustees  in  their  discretion  shall  think  fit  and  desirable  for  the 
purpose  of  giving  effect  to  my  wishes.  ’ 9 In  that  case,  as  in  this, 
the  money  was  taken  out  of  the  estate,  and  was  directed  to  he 
spent  for  the  maintenance  of  the  premises,  and  the  period  over 
which  the  expenditure  should  extend  was  likewise  indefinite,  and, 
not  being  for  a charity,  was  held  to  be  void  as  in  violation  of  the 
rule  against  perpetuities. 

In  Came  v.  Long,  the  testator  gave  his  mansion  house  and 
premises,  with  the  appurtenances  thereunto  belonging,  unto  the 
trustees  for  the  time  being  of  the  Penzance  Public  Library,  to 
hold  to  them  and  to  their  successors  forever  for  the  use,  benefit, 
maintenance  and  support  of  the  said  library.  The  Lord  Chan- 
cellor in  giving  judgment  in  that  case  said  (p.  79)  : “My  objec- 
tion to  it  is,  that  it  tends  to  a perpetuity.  . . The  clear 

intention  of  the  testator,  as  expressed  by  the  will,  is,  that 
this  should  be  a gift  in  perpetuity  to  this  institution  at 
Penzance.  The  gift  is  to  the  trustees  for  the  time  being  of  the 
society  and  their  successors,  to  be  held  by  them  and  their  suc- 
cessors for  ever,  they  holding  it  for  the  use,  benefit,  mainten- 
ance and  support  of  the  library.  If  the  devise  had  been  in 
favour  of  the  existing  members  of  the  society,  and  they  had  been 
at  liberty  to  dispose  of  the  property  as  they  might  think  fit,  then 
it  might,  I think,  have  been  a lawful  disposition  and  not  tending 
to  a perpetuity.  But  looking  to  the  language  of  the  rules  of  this 
society,  it  is  clear  that  the  library  was  intended  to  be  a perpetual 
institution,  and  the  testator  must  be  presumed  to  have  known 
what  the  regulations  were.  By  one  of  these  it  is  provided,  that 
the  society  is  not  to  be  broken  up  so  long  as  ten  members  remain. 
The  devise,  therefore,  is  for  the  benefit  of  a subsisting  society, 
and  one  which  is  intended  to  subsist  so  long  as  ten  members 
remain,  and  the  property  comprised  in  the  devise  is  therefore 
to  be  taken  out  of  commerce  and  to  become  inalienable,  not 
for  a life  or  lives  in  being  and  twenty-one  years  afterwards,  but 


Teetzel,  J. 

1912 

Kennedy 

v. 

Kennedy. 


110 


ONTARIO  LAW  REPORTS. 


Teetzel,  J. 

1912 

Kennedy 

v. 

Kennedy. 


[VOL. 


for  so  long  as  ten  members  of  the  society  shall  remain.  This 
seems  to  me  a purpose  which  the  law  will  not  sanction  as  tend- 
ing to  a perpetuity.” 

Now,  in  this  case,  the  testator  in  effect  says  that  his  trustees 
shall  spend  such  sums  out  of  his  residuary  estate  as  they  may 
deem  necessary  to  keep  up  and  maintain  his  residence  until 
it  is  sold  and  disposed  of ; and,  while  such  keeping  up  and  main- 
tenance is  for  the  benefit  of  James  Harold  Kennedy  and  those 
who  may  succeed  him  as  devisees  and  donees,  they  have  no  con- 
trol over  or  power  of  disposition  of  the  residue  not  appropriated 
by  the  trustees  to  keeping  up  and  maintaining  the  residence. 
Nor  have  they  the  power,  upon  selling  the  residence,  to  dispose 
of  any  part  of  the  fund  set  aside  for  its  maintenance. 

In  the  case  reported  in  L.R.  6 P.C.  381,  a gift  “of  the  upper 
storey  of  four  specific  houses  or  shops,  to  be  occupied  by  the 
several  members  and  descendants  of  K.S.C.  and  L.K.W.  as 
already  proposed,”  that  is,  as  the  context  shewed,  as  a family 
house  for  the  use  of  two  separate  families,  was  held  to  be  void 
for  uncertainty,  and  as  denoting  an  intention  to  create  a 
perpetuity. 

The  analogy  in  this  case  is  not,  of  course,  the  giving  of  this 
residence  for  the  occupation  of  the  son  James  Harold  and  the 
two  ladies,  but  for  its  perpetual  maintenance  or  until  “it  should 
be  necessary  that  the  said  residence  should  be  sold  and  disposed 
of.” 

In  Rickard  v.  Robson , it  was  held  that  a bequest  of  money, 
the  interest  of  which  was  to  be  applied  in  keeping  up  the  tombs 
of  the  testator  and  of  his  family,  is  void  as  a perpetuity.  It  is 
difficult  to  draw  a distinction  between  a provision  for  keeping 
up  a tomb  as  a resting  place  of  the  deceased  members  of  the 
family  and  a provision  for  the  indefinite  keeping  up  of  a resi- 
dence as  a habitation  for  the  living  members  of  the  family.  See 
also  Hoare  v.  Osborne  (1866),  L.K.  1 Eq.  585;  Fowler  v.  Fowler 
(1864),  33  Beav.  616. 

In  In  re  Gassiot  (1901),  70  L.J.N.S.  Oh.  242,  a bequest  of 
£4,000  to  the  Vintners  Company  on  condition  that  they  accept  a 
bequest  of  a portrait  with  certain  obligations,  and  enjoining  the 
company  out  of  the  income  of  the  £4,000  to  keep  in  due  and 
proper  repair  the  portrait,  cleaning  and  regilding  its  frame  not 


XXVI.] 


ONTARIO  LAW  REPORTS. 


Ill 


less  than  once  in  every  four  years,  the  surplus  income  to  be 
applied  for  the  benefit  of  individuals  answering  a particular 
description,  etc.,  was  held  to  be  void  as  infringing  the  rule  against 
perpetuities. 

See  also  In  re  Dutton  (1878),. 4 Ex.  D.  54. 

I think  the  general  proposition  of  law  to  be  drawn  from  the 
above  cases  is,  that  any  gift,  not  being  charitable,  the  object  of 
which  is  to  tie  up  property  for  an  indefinite  time,  is  void. 

It  seems  to  me  that  there  can  be  no  question  in  this  case  as 
to  the  indefiniteness  of  the  time  during  which  the  residuary 
estate  was  to  be  tied  up,  inasmuch  as  many  generations  of  owners 
may  continue  to  occupy  the  residence  before  the  happening  of 
the  event  upon  which  further  expenditures  are  to  cease,  i.e.,  when 
it  shall  “be  necessary  that  the  said  residence  should  be  sold  and 
disposed  of.” 

Nor  do  I think  that,  upon  a fair  interpretation  of  the  testa- 
tor’s language,  it  can  be  held  that  the  residue,  except  such  as, 
in  the  honest  discretion  of  the  trustees,  it  is  necessary  to  expend 
for  up-keep  and  maintenance  of  the  residence  according  to  the 
standard  fixed  by  the  testator,  is  not  tied  up  and  taken  from 
commerce,  within  the  meaning  of  the  authorities.  Neither  the 
owners  of  the  residence  nor  the  trustees  have  any  right  to  dis- 
pose of  the  fund  for  any  other  purpose.  The  trustees  are  bound 
to  hold  the  whole  fund  for  the  purpose  of  the  up-keep  and 
maintenance  until  the  happening  of  the  event  when,  according  to 
the  testator’s  wish,  the  residue  was  to  be  distributed  among  his 
pecuniary  legatees;  and  I cannot  conceive  how  the  fact  that, 
because  it  has  been  held  that  the  testator’s  wish  in  that  regard 
has  been  defeated  by  reason  of  his  language  contravening  the 
law,  any  advantage  therefrom  is  to  accrue  to  the  owner  of  the 
residence. 

I am  unable  to  yield  to  the  argument  by  Mr.  Armour,  that, 
because  the  trust  is  in  its  nature  imperative,  and  the  amount  to 
be  expended  is  left  to  the  discretion  of  the  trustees,  they  can  at 
once  appropriate  the  whole  fund,  regardless  of  the  amount 
thereof  or  of  the  necessities  for  expenditures,  for  the  benefit  of 
the  present  owner,  as,  by  his  deed  poll  (exhibit  4),  the  defend- 
ant James  H.  Kennedy,  the  owner  and  sole  trustee,  has  attempted 
to  do.  Like  any  other  trust,  it  must  be  executed  in  good  faith ; 


Teetzel,  J. 

1912 

Kennedy 

v. 

Kennedy, 


112 

Teetzel,  J. 

1912 

Kennedy 

v. 

Kennedy. 


ONTARIO  LAW  REPORTS.  [vol. 

and  the  Court  will  exercise  its  control  to  prevent  a dishonest 
exercise  of  discretion.  Whether  or  not  the  defendant  James  II. 
Kennedy,  in  the  exercise  of  his  discretion  as  evidenced  by  the 
deed  poll,  has  acted  honestly,  I am  unable,  upon  the  evidence, 
to  say;  because  the  actual  amount  of  the  fund  in  his  hands  or 
the  necessities  for  up-keep  and  maintenance  were  not  dis- 
closed in  evidence  before  me;  so  that,  if  my  judgment 
as  to  the  total  invalidity  of  the  gift  is  not  maintained,  the 
plaintiff  and  other  next  of  kin  should  be  at  liberty,  in  another 
action,  if  so  advised,  to  contest  the  good  faith  of  James  H.  Ken- 
nedy in  the  exercise  of  the  discretion  as  evidenced  by  the  deed 
poll. 

The  whole  estate  was  charged  with  the  payment  of  an  annuity 
of  $400  to  the  plaintiff,  and  he  claims  that  the  lands  embraced 
in  the  residuary  gift  cannot  be  sold  except  subject  to  that  charge. 
In  view  of  the  wide  power  of  sale  vested  in  the  trustees,  it  is,  I 
think,  perfectly  plain  that  they  may  make  title  to  the  purchaser 
free  from  the  charge,  but  the  proceeds  will  be  charged  with 

At  the  trial,  I dismissed  the  action  as  against  the  defend- 
ants Suydam  and  the  Suydam  Realty  Company,  but  reserved 
the  question  of  costs.  I now  think  that  there  is  no  good  reason 
why  the  plaintiff  should  not  pay  them. 

The  judgment  will  therefore  be : — 

(1)  Declaring  that  the  gift  of  the  residue  is  void  as  creating 
a perpetuity,  and  that  the  lands  embraced  therein  may  be  sold 
free  from  the  plaintiff’s  annuity;  declaring  that  the  proceeds  of 
the  sale  are  charged  therewith;  and  that,  as  to  the  whole  resi- 
duary gift,  there  is  an  intestacy;  reserving  to  the  plaintiff  and 
other  next  of  kin,  in  the  event  of  it  being  held  that  my  judgment 
is  wrong,  the  right  to  impeach,  in  another  action,  the  good  faith 
of  the  defendant  James  H.  Kennedy  in  the  exercise  of  his  discre- 
tion as  evidenced  by  the  deed  poll. 

(2)  That  the  action  be  dismissed  with  costs  as  against  the 
defendant  Suydam  and  the  Suydam  Realty  Company. 

(3)  Except  as  to  those  costs,  the  costs  of  all  parties  shall  be 
paid  out  of  the  residuary  estate. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


113 


[IN  CHAMBERS.] 

Re  Hutchinson.  1912 

Infant — Custody — Habeas  Corpus — Right  of  Father  against  Maternal  March  29. 

Grandparents — Welfare  of  Child — Agreement  under  Seal — Adoption — 

1 Geo.  V.  eh.  35,  sec.  3 — Application  of  sub-sec.  ('2)  to  Father  of  Child 

■ — Principles  of  Equity. 

Upon  an  application,  on  the  return  of  a habeas  corpus,  by  the  father  of  a 
child  under  three  years  of  age,  for  the  delivery  of  the  child  to  him  by  the 
maternal  grandparents:  — 

Held,  upon  the  evidence,  that,  apart  from  agreement,  the  interests  of  the 
child  would  be  better  served  by  leaving  her  with  the  grandparents;  the 
father  having  all  reasonable  access  to  her. 

Held,  also,  that  an  instrument  signed  and  sealed  by  the  father,  in  view  of 
the  mother’s  impending  death,  by  which  the  possession,  custody,  control, 
and  care  of  the  child,  was  placed  in  the  hands  of  the  grandparents,  was, 
while  it  stood,  a bar  to  the  father’s  application;  and  it  was  valid  in  law 
under  R.S.O.  1897,  ch.  340,  sec.  2 (now  1 Geo.  V.  ch.  35,  sec.  3). 

Re  Davis  (1909),  18  O.L.R.  384,  distinguished. 

Quaere,  whether  a father  is  included  in  the  words  used  in  sub-sec.  (2). 

Semble,  that,  apart  from  the  statute,  if  the  agreement  were  made  by  the 
father  in  pursuance  of  an  understanding  that  the  child  was  to  inherit 
the  property  of  the  grandparents,  and  if  she  were  brought  up  by  them 
under  that  impression,  and  if  that  were  supplemented  by  an  actual  deed 
or  will,  irrevocable,  to  such  effect,  the  'Court,  acting  on  principles  of 
equity,  would  not,  at  the  father’s  instance,  disturb  that  arrangement. 

Held,  therefore,  in  the  peculiar  circumstances  of  the  case,  that  the  custody 
should  not  be  changed. 

Ex  p.  Templer  (1847),  2 Saund.  & C.  169,  followed. 

Motion  by  W.  H.  Hutchinson,  the  father  of  Adah  May 
Hutchinson,  a child  of  two  years,  upon  the  return  of  a writ  of 
habeas  corpus , for  an  order  for  the  delivery  of  the  child  to  him, 
by  the  maternal  grandparents,  the  respondents. 

March  26.  The  motion  was  heard  by  Boyd,  C.,  in  Chambers. 

W.  N.  Ferguson , K.C.,  for  the  applicant. 

V.  A.  Sinclair , for  the  respondents. 

March  29.  Boyd,  C.: — It  is  always  unsatisfactory  to  deal 
with  disputed  facts  as  set  forth  in  conflicting  affidavits.  There 
is  a mass  of  material  before  me,  which  I have  carefully  perused, 
and  find  that  there  is  a cumulation  of  domestic  details  on  which 
the  various  deponents  contradict  each  other  in  an  embarrassing 
manner.  Disregarding  the  smaller  discrepancies,  I should  judge, 
despite  all  the  divergent  opinions,  that  there  is  no  danger  likely 
to  arise  to  the  child,  whether  she  stays  with  her  grandparents  or 
goes  to  her  father,  in  regard  to  any  tubercular  infection.  Nor 
do  I think  there  is  any  lack  of  affection  on  the  part  of  the  father, 


114 


ONTARIO  LAW  REPORTS. 


[VOL. 


Boyd,  C. 

1912 

Re 

Hutchinson 


though  it  may  be  he  is  not  so  attractive  to  the  child  as  her  grand- 
parents. They  have  been  to  all  intents  in  loco  parentis  to  this 
young  girl  since  her  birth.  The  parents  of  the  infant  lived  in 
the  house  and  home  of  the  maternal  grandparents  from  the  date 
of  their  marriage  till  the  death  of  the  wife  on  the  7th  December, 
1911,  with  a short  interval  from  April  to  the  middle  of  July, 
1911,  when  the  parents  occupied  another  house.  But  during 
these  few  months  the  infant  was  left  with  the  grandparents. 
The  child  was  born  in  August,  1909,  and  is  yet  under  three  years 
of  age — said  to  be  an  active,  healthy  child,  yet  easily  excited  and 
needing  careful  treatment. 


I have  no  manner  of  doubt  that  the  child  cannot  be  better 
placed  than  to  be  left  with  the  grandparents;  they  are  well  to 
do,  living  in  a roomy  house,  with  a large  lot,  in  which  the  child 
can  play.  The  character  of  the  grandparents  is  beyond  reproach, 
and  they  stand  particularly  well  in  the  opinion  of  the  neighbours 
and  townsfolk  of  Tillsonburg.  They  are  devotedly  attached  to 
the  child,  as  is  the  child  to  them,  and  they  have  really  had  every- 
thing to  do  with  and  for  the  child  in  its  sleeping,  clothing,  main- 
tenance, and  personal  supervision.  The  opinion  I have  formed  on 
this  head  was  shared  in  by  the  father  himself  in  his  conversation 
with  Ernest  Tretheway,  and  by  Dr.  Reid.  It  is  also  the  opinion 
(for  what  it  is  worth)  of  Mr.  and  Mrs.  Honsberger,  who,  having 
made  affidavits  to  sustain  the  father’s  claim  on  the  20th  March, 
explain  away  their  statements  in  later  affidavits  made  on  the  25th 
March. 

To  hand  over  the  child  to  the  father  would  be  in  the  nature 
of  an  experiment;  he  is  a working  man,  aged  about  twenty-six, 
with  no  home  at  present;  he  proposes  to  establish  one  with  the 
assistance  of  an  elder  sister,  who  has  been  for  the  last  six  or  seven 
years  working  in  a cutlery  company’s  works  at  Niagara  Falls, 
New  York,  and  has  had  experience  in  looking  after  children. 
Owing  to  the  scarcity  of  suitable  houses  in  Tillsonburg,  it  is  not 
likely  that  the  father  can  do  more  than  get  some  rooms  where  the 
child  will  be  in  a sense  cooped  up  and  with  the  street  for  a play- 
ground. The  contrast  between  these  prospects,  even  if  the 
household  machinery  works  smoothly,  and  the  advantages  pos- 
sessed and  now  enjoyed  by  the  child,  is  obvious. 

No  question  of  religion  enters  in  to  embitter  the  situation  of 


XXVI.] 


ONTARIO  LAW  REPORTS. 


115 


the  claimants;  and  I see  no  good  reason  why  the  father  should 
not  return  to  the  household  of  the  grandparents,  as  they  offered  1912 
to  allow  him  to  do  after  the  death  of  the  child’s  mother.  He  says  Ke' 
that  he  would  have  done  so  had  they  destroyed  an  agreement  Hutchinson 
which  he  signed  on  the  4th  December,  1911.  This  is  an  instru- 
ment under  seal,  prepared  in  view  of  the  mother’s  impending  death, 
so  as  to  place  the  possession,  custody,  control,  and  care  of  the  child 
in  the  hands  of  the  grandparents,  and  providing  that  the  .father 
shall  have  access  to  the  child  at  all  reasonable  hours.  This  instru- 
ment is  upheld  by  the  grandparents,  but  is  being  attacked  in  an 
action  by  the  father  to  set  it  aside,  which  is  now  pending.  I 
must  regard  this  at  present  as  a valid  agreement  which  is  binding 
on  the  father.  It  is  not  for  me,  on  such  material  as  I have  before 
me,  to  anticipate  a decision  of  the  Court  on  this  dispute.  I have 
no  doubt  that  the  wishes  of  the  dying  wife  were  that  the  child 
should  be  left  to  the  care  of  the  grandparents. 

The  signed  and  sealed  agreement  of  the  4th  December,  while 
it  stands,  appears  to  be  a bar  to  any  such  application  as  the 
present;  and  it  is  valid  in  law  under  the  statutory  provisions  in 
1 Geo.  V.  ch.  35,  sec.  3 (0.),*  taken  from  the  revised  statute  in 
force  when  the  deed  was  executed.  But,  apart  from  this  agree- 
ment, I think,  upon  the  material  placed  before  me,  that  the  in- 
terests of  the  child  will  be  better  subserved  by  letting  her  custody 
remain  in  statu  quo;  the  father  having  all  reasonable  access  to  the 
child  when  he  so  desires;  this  right  of  access  to  be  settled  by  the 
Local  Master,  if  the  parties  cannot  agree. 

In  Re  Davis  (1909),  18  O.L.R.  384,  the  head-note  reads  that 
the  law  of  this  Province  knows  nothing  of  adoption;  but  the 
attention  of  the  Court  was  not  directed  to  the  Act  I have  cited, 
and  proceeded  on  the  provisions  of  the  Act  relating  to  neglected 

*3. — (1)  The  father  of  a child  under  the  age  of  twenty-one  years, 
whether  horn  at  the  time  of  the  decease  of  the  father  or  at  the  time  en 
ventre  sa  mere,  by  deed  or  by  his  last  will  and  testament  in  such  manner 
and  from  time  to  time  as  he  shall  think  fit,  may  dispose  of  the  custody  and 
education  of  such  child  while  he  remains  under  the  age  of  twenty-one 
years  or  for  any  lesser  time  to  any  person  in  possession  or  remainder. 

(2)  Such  disposition  shall  be  good  and  effectual  against  every  person 
claiming  the  custody  or  education  of  such  child  as  guardian  in  socage  or 
otherwise. 

(3)  The  person  to  whom  the  custody  of  such  child  is  so  committed  may 
maintain  an  action  against  any  person  who  wrongfully  takes  away  or 
detains  him  for  the  recovery  of  such  child  and  for  damages  for  such 
taking  away  or  detention  for  the  use  and  benefit  of  the  child,  12  Car.  II. 
ch.  24,  sec.  8;  BJ8.0.  1897,  ch.  340,  sec.  2. 


116  ONTARIO  LAW  REPORTS.  [vol. 

children,  and  in  particular  those  that  can  be  called  deserted  and 
1912  abandoned — which  does  not  apply  to  this  child. 

Rir  It  may  be  that  the  proper  reading  of  the  statute  is,  that  the 

Hutchinson  declaration  that  such  disposition  shall  be  good  and  effectual 
against  all  and  every  person  claiming  the  custody  and  tuition  of 
the  child,  does  not  include  a father,  if  living.  But  I do  not  see 
any  decided  case  to  that  effect.  But,  apart  from  the  statute, 
if  the  agreement  has  been  made  by  the  father  in  pursuance  of  an 
understanding  that  the  child  was  to  be  the  heir  to  or  inheritor  of 
the  property  of  the  grandparents,  and  has  been  brought  up  by 
them  under  that  impression,  and  if  that  is  supplemented  by  an 
actual  deed  or  will,  irrevocable,  to  such  effect,  the  Court,  acting 
on  principles  of  equity,  will  not,  at  the  father’s  instance,  disturb 
that  arrangement.  I refer  to  the  considerations  influencing  the 
Court  in  such  cases  as  Lyons  v.  Blenkin  (1821),  Jac.  245;  Roberts 
v.  Hall  (1882),  1 O.R.  388,  approved  of  in  Chisholm  v.  Chisholm 
(1908),  40  S.C.R.  115. 

Therefore,  in  the  peculiar  circumstances  of  this  case,  following 
Ex  p.  Templer  (1847),  2 Saund.  & C.  169,  I refuse  to  change  the 
• custody. 

I do  not  award  costs  to  either  side. 

I can  only  express  the  earnest  desire  that  the  parties  may 
take  thought  and  act  reasonably  and  considerately  on  both  sides, 
so  as  to  preserve  harmony  in  the  family  and  avoid  a devastating 
litigation  in  the  Courts,  which  may  go  far  to  impoverish  the 
moneyed  litigant,  and  to  embarrass  the  one  who  is  poorer. 

[An  appeal  from  the  above  decision  was  heard  by  a Divisional  Court 
on  the  27th  May,  1912.  Judgment  was  reserved.] 


XXVI.] 


ONTARIO  LAW  REPORTS. 


117 


[Falconbridge,  C.J.K.B.] 

Bethune  v.  The  King. 

Succession  Duty — Bequest  of  Share  of  Income  of  Fund — “ Legacy  by  Way  of 
Annuity ” — Succession  Duty  Act,  7 Edw.  VII.  ch.  10,  sec.  11(1) — Vol- 
untary Payment  to  Crown  by  Executors  of  Will — Death  of  Legatee — 
Right  to  Recover  Part  of  Sum  Paid — Mistake  of  Fact  or  Law — Im- 
providence. 


A bequest  in  a will  of  the  interest  or  income  of  a fund  is  not  a “legacy 
given  by  way  of  annuity,”  within  the  meaning  of  sec.  11(1)  of  the  Suc- 
cession Duty  Act,  7 Edw.  VII.  ch.  10,  but  simply  a gift  of  interest  or 
income. 

Where  the  whole  of  the  succession  duty  attributable  to  the  share  of  the 
income  from  a residuary  trust  fund  bequeathed  to  a daughter  of  the 
testator  was  paid  by  his  executors  to  the  Treasurer  of  Ontario,  and  the 
legatee  died  about  a year  and  a half  after  the  death  of  the  testator, 
when  only  one  of  the  four  “equal  consecutive  annual  instalments”  men- 
tioned in  sec.  11(1)  would  have  been  paid  if  the  method  of  payment  by 
instalments  had  been  adopted:  — 

Held,  that  the  payment  was  a voluntary  one,  not  made  under  a mistake  of 
fact;  and,  if  made  under  a mistake  of  law,  no  part  of  the  money  could 
be  recovered  by  the  executors  from  the  Crown. 

Semble,  that  the  payment  was  not  improvident. 

Petition  of  right  presented  by  the  suppliants  as  executors 
and  trustees  of  the  will  of  John  Sweetland,  deceased. 

January  27.  The  petition  was  tried  before  Falconbridge, 
C.J.K.B.,  without  a jury,  at  Ottawa. 

F.  H.  Chrysler,  K.C.,  for  the  suppliants. 

H.  D.  Gamble,  K.C.,  for  the  Crown. 

March  30.  Falconbridge,  C.J.: — The  petition,  after  setting 
out  the  will  and  probate  thereof,  states  that  the  Solicitor  to  the 
Treasury  for  Ontario  furnished  the  suppliants  a statement  shewing 
that  the  total  succession  duty  payable  in  respect  of  the  legacies 
and  bequests  of  the  said  will  amounted  to  the  sum  of  $8,379.82; 
that  of  this  amount  the  sum  of  $2,139.80  was  attributable  to  duty 
payable  in  respect  of  the  annuity  bequeathed  by  the  will  to  Caro- 


1912 

March  30. 


118 


ONTARIO  LAW  REPORTS. 


Falconbridge, 

C.J. 

1912 

Bethune 

v. 

The  King 


[VOL. 


line  Florence  Anderson;*  that,  in  and  by  sec.  11  of  the  Succession 
Duty  Act  then  in  force,  the  duty  payable  upon  any  legacy  given 
by  way  of  annuity  was  to  be  paid  in  four  equal  consecutive  annual 
instalments;  and  that,  in  the  event  of  the  annuitant  dying  before 
the  expiration  of  the  first  four  years,  payment  only  of  the  instal- 
ments which  fell  due  before  the  death  of  the  annuitant  should  be 
required. 

The  suppliants,  deeming  it  advisable  to  discharge  the  whole 
of  the  succession  duty  at  once,  and  obtain  a release  thereof,  paid 
to  the  Treasurer  for  Ontario  a sum  of  money  which  included  the 
duty,  amounting  in  the  aggregate  to  $2,139.80,  attributable  to 
the  annuity  bequeathed  to  the  said  Caroline  Florence  Anderson. 

The  said  Caroline  Florence  Anderson  departed  this  life  on  or 
about  the  9th  day  of  November,  1908;  and,  therefore,  the  suppli- 
ants claim  that,  at  the  time  of  her  decease,  the  only  amount  which 
they  were  legally  liable  for  was  the  instalment  of  $534.95  which 
became  payable  on  the  5th  May,  1908.  And  the  suppliants 
claim  that  they  paid  to  the  said  Treasurer  $1,604.85  in  excess  of 
the  legal  and  proper  amount  payable. 

The  Attorney-General  for  Ontario,  on  behalf  of  His  Majesty, 
objecting  that  the  petition  of  right  discloses  no  facts  giving  any  ' 
cause  of  action  to  the  petitioners  against  the  Crown,  says  that  the 
legacy  or  bequest  to  the  said  Caroline  Frances  Anderson  was  not 
an  annuity  within  the  meaning  of  the  Succession  Duty  Act  then 
in  force;  and,  therefore,  is  not  affected  by  that  provision  of  sec.  11, 
sub-sec.  1,  of  said  Act,  which  requires  payment  only  of  the  in- 
stalments falling  due  before  the  death  of  the  annuitant;  and  he 

*The  testator  died  on  the  5th  May,  1907.  His  will  was  dated  the 
10th  March,  1906.  After  certain  specific  bequests,  he  created  a residuary 
trust  fund,  and  directed  that  his  executors  and  trustees  .should  stand  pos- 
sessed thereof  upon  trust  during  the  respective  lives  of  his  daughters, 
Selina  Florence  Geddes,  Elizabeth  Jane  Thompson,  and  Caroline  Florence 
Anderson,  “to  pay  the  net  income  derivable  from  the  investment  of  the 
said  residuary  trust  fund  . . . unto  the  said  Selina  Florence  Geddes, 

Elizabeth  Jane  Thompson,  and  Caroline  Florence  Anderson,”  in  certain 
proportions  specified;  “and,  upon  the  death  of  any  of  my  said  daughters, 
in  trust  to  pay  the  share  of  such  deceased  daughter  in  the  said  net-income 
unto  the  surviving  daughters  in  equal  shares,  and,  upon  the  death  of 
any  one  of  such  two  surviving  daughters,  in  trust  to  pay  the  whole  of 
the  said  income  unto  the  sole  surviving  daughter  during  her  lifetime,  and, 
upon  the  death  of  such  sole  surviving  daughter,  in  trust  to  divide  the 
said  residuary  trust  fund  between  my  granddaughter  Isabella  Shaw, 

. . . the  children  of  the  said  Caroline  Florence  Anderson,  and  the 

children  of  my  stepson  . . . , share  and  share  alike,  so  that  each  of  such 

persons  will  receive  an  equal  amount.” 


XXVI.] 


ONTARIO  LAW  REPORTS. 


119 


further  pleads  that,  if  the  legacy  in  question  does  come  within  the 
provision  of  sec.  11,  then  the  amount  paid  for  succession  duty 
was  paid  under  a mutual  mistake  of  law,  and  is  not  recoverable 
back. 

He  further  pleads,  in  the  alternative,  that,  if  the  petitioners 
are  entitled  to  the  repayment  of  the  said  succession  duty  as  claimed 
in  the  petition,  then  a further  succession  took  place  on  the  death 
of  the  said  Caroline  Florence  Anderson  as  to  that  portion  of  the 
estate  from  which  her  claim  was  derived;  and  the  succession  duty 
thereon  should  be  ascertained  and  paid. 

Further,  in  the  alternative,  he  pleads  that  the  commutation 
of  the  succession  duty  to  be  paid  was  compromised  upon  the  con- 
sideration of  the  whole  estate,  and  the  different  interests  therein; 
and,  if  the  petitioners  are  entitled  to  repayment  as  asked,  then  the 
whole  matter  should  be  re-opened,  and  a new  computation  made. 

The  case  rests  entirely  on  the  correspondence  and  on  the  un- 
contradicted evidence  of  Mr.  Bethune. 

The  money  was  voluntarily  paid  in  supposed  pursuance  of 
secs.  11  (1)  and  12  (5)  of  the  Succession  Duty  Act  then  in  force 
(7  Edw.  VII.  ch.  10). 

Section  11  (1)  is,  in  part,  as  follows:  “ Provided  that  the 
duty  chargeable  upon  any  legacy  given  by  way  of  annuity  whether 
for  life  or  otherwise  shall  be  paid  in  four  equal  consecutive  annual 
instalments,  the  first  of  which  shall  be  paid  before  the  falling  due 
of  the  first  year’s  annuity  and  each  of  the  three  others  within  the 
same  period  in  each  of  the  next  succeeding  three  years.  In  case 
the  annuitant  dies  before  the  expiration  of  the  said  four  years 
payment  only  of  the  instalments  which  fall  due  before  his  death 
shall  be  required.” 

Section  12  (5)  is  as  follows:  “ Notwithstanding  that  the  duty 
may  not  be  payable  under  this  section  until  the  time  when  the 
right  of  possession  or  actual  enjoyment  accrues  an  executor  or 
person  who  has  the  custody  or  control  of  the  property,  may,  with 
the  consent  of  the  Treasurer,  commute  the  duty  which  would 
or  might,  but  for  the  commutation,  become  payable  in  respect 
of  such  interest  in  expectancy,  for  a certain  sum  to  be  presently 
payable,  and  for  determining  that  sum  the  Treasurer  shall  cause 
a present  value  to  be  set  upon  such  duty,  regard  being  had  to  the 
contingencies  affecting  the  liability  to  and  the  rate  and  amount 


Falconbridge, 

O.J. 

1912 

Bethune 

v. 

The  King 


120 


ONTARIO  LAW  REPORTS. 


[VOL. 


Falconbridge, 

C.J. 


1912 

Bethune 

V. 

The  King 


of  such  duty  and  interest;  and  on  the  receipt  of  such  sum  the 
Treasurer  shall  give  a certificate  of  discharge  from  such  duty.” 
Both  the  Solicitor  to  the  Treasury  and  the  suppliants  seem  to 
have  assumed  that  the  benefit  conferred  by  the  will  upon  Mrs. 
Anderson  was  a legacy  given  by  way  of  annuity,  within  the  mean- 
ing of  sec.  11  (1).  The  authorities  are  quite  clear  that  it  was  not 
an  annuity.  They  are  set  out  in  the  extended  notes  of  argument, 
and  the  effect  both  of  English  and  American  cases  is,  that  the 
income  or  interest  of  a certain  fund  is  not  an  annuity,  but  simply 
a gift  of  interest  or  income.  Among  the  numerous  authorities 
cited,  I refer  particularly  to  Foley  v.  Fletcher  (1858),  3 H.  & N.  769; 
Winter  v.  Mouseley  (1819),  2 B.  & Aid.  802,  at  p.  806,  where  Best, 
J.,  says:  “I  have  . . . always  understood  the  meaning  of 

an  annuity  to  be  where  the  principal  is  gone  forever,  and  it  is 
satisfied  by  periodical  payments.”*  See,  in  the  United  States, 
Booth  v.  Ammerman  (1856),  4 Bradford  ((N.Y.  Surr.)  129,  at  p. 
133. 


If  the  money,  then,  was  paid  under  mistake  of  law,  which 
Mr.  Chrysler  seems  to  disavow,  it  could  not  be  recovered  back. 
James,  L.J.,  says,  in  Rogers  v.  Ingham  (1876),  3 Ch.D.  351,  at 
p.  355:  “I  have  no  doubt  that  there  are  some  cases  which  have 
been  relied  on,  in  which  this  Court  has  not  adhered  strictly  to 
the  rule  that  a mistake  in  law  is  not  always  incapable  of  being 
remedied  in  this  Court;  but  relief  has  never  been  given  in  the  case 
of  a simple  money  demand  by  one  person  against  another,  there 
being  between  those  two  persons  no  fiduciary  relation  whatever, 
and  no  equity  to  supervene  by  reason  of  the  conduct  of  either  of 
the  parties  . . .”  That  is  not  this  case,  and  it  is  the  Crown 

from  whom  repayment  is  sought;  and  the  position  of  the  Crown 
is,  as  one  might  expect,  certainly  not  inferior  to  that  of  a 
subject.  This  is  very  clearly  laid  down  in  William  Whiteley 
Limited  v.  The  King  (*1909),  101  L.T.R.  741. 

Then  it  was  certainly  not  paid  under  a mistake  of  fact.  The 
only  mistake  (if  any)  was  something  which  related  to  a future 

*The  following  English  cases  were  cited,  in  addition  to  those  mentioned 
by  the  learned  Chief  Justice:  Gibson  v.  Bott  (1802),  7 Ves.  89,  96;  Bridie 
v.  Field  (1854),  19  Beav.  497;  Hedges  v.  Harpur  (1858),  3 De  G.  & 
J.  129;  Baker  v.  Baker  (1858),  6 H.L.C.  616;  In  re  Crane,  [1908]  1 Ch. 
379. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


121 


event,  viz.,  the  absolutely  unforeseen  occurrence  of  this  lady  de-  FalT.j*ldge’ 
parting  this  life  when  she  did.  1912 

I do  not  see,  therefore,  how  the  suppliants  can  recover.  It  is  

not  a case  of  hardship;  the  estate  as  a whole  does  not  suffer.  If  Bethune 
the  money  had  not  been  paid  in  this  way,  there  would  have  been  The  King 
some  other  succession;  and,  some  of  the  reversionary  legatees 
being  strangers,  it  is  probable  that,  in  the  result,  a larger  amount 
of  duty  would  have  to  be  paid. 

In  this  view,  and  considering  that  it  was  done  to  facilitate  a 
winding-up  of  the  estate,  I think  that  the  payment  by  the  ex- 
ecutors was  not  improvident;  and  probably  in  the  passing  of  their 
accounts  this  circumstance  will  be  taken  into  consideration.  • 

I am  of  the  opinion,  therefore,  that  no  case  has  been  proved 
giving  rise  to  any  cause  of  action  against  the  Crown;  and  that  the 
petition  should  be  dismissed. 

It  is  not  a case  for  costs  as  between  the  parties.  If  I have  the 
power  so  to  order,  I direct  that  the  suppliants  be  paid  their  costs, 
as  between  solicitor  and  client,  out  of  the  estate. 


[IN  THE  COURT  OF  APPEAL.] 

Stone  v.  Canadian  Pacific  R.W.  Co.  C.  A. 

Railway — Injury  to  Brakesman — Foreign  Box  Freight  Car — Appliances  for  1912 
Coupling — Dominion  Railway  Act,  secs.  264,  317 — Interchange  of  “ 

Tr  affic — N eg  ligenc  e — E vidence — J ury . Apr  1 R4 

The  plaintiff,  who  had  had  experience  as  a railway  brakesman,  was  acting 
as  brakesman  on  a freight  train  of  the  defendants,  when  it  became  his 
duty  to  effect  a coupling  between  a freight  box  car,  part  of  the  train 
referred  to,  which  car  (called  the  Wabash  car)  did  not  belong  to  the  de- 
fendants, but  had  been  received  by  them  from  a foreign  railway  company 
in  the  ordinary  course  of  interchange  of  traffic,  pursuant  to  sec.  317  of 
the  Railway  Act,  R.S.C.  1906,  ch.  37,  and  another  car.  The  Wabash  car 
was  provided  with  automatic  couplers;  but,  while  it  had  a ladder  at  the 
side,  near  the  end,  it  had  no  ladder  on  the  end,  as  required  by  sec.  264 
(5)  of  the  Act.  When  the  engine  was  moving  the  Wabash  car  towards 
the  other  car,  the  plaintiff,  observing  that  the  knuckle  and  coupler  were 
closed,  went  down  the  ladder  on  the  side  of'  the  Wabash  car,  near  the 
end  which  was  approaching  the  other  car,  with  the  intention  of  getting 
hold  of  the  coupler-rod  to  open  the  knuckle  so  as  to  receive  the  coupler 
of  the  other  car.  He  went  to  the  bottom  step,  and,  with  his  left  foot 
resting  on  it,  and  holding  on  to  the  lowest  rung  of  the  ladder  with  his 
left  hand,  endeavoured  to  reach  round  the  end  of  the  car  to  the  coupler- 
rod.  While  he  was  in  this  position,  the  moving  car  passed  over  a cross- 
ing, and  the  jar  caused  his  foot  to  slip  from  the  bottom  step,  and  he  fell 
with  his  arm  under  the  wheels.  In  an  action  for  damages  for  his 
injuries : — 


9 — XXVI.  O.L.E. 


122 


ONTARIO  LAW  REPORTS. 


C,  A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 


[VOL. 


Held,  that  what  befell  the  plaintiff  was  not  due  to  the  absence  of  a ladder 
at  the  end  of  the  car,  nor  to  the  insufficient  length  oif  the  coupler-rod; 
but  to  the  plaintiff  not  having  taken  the  proper  course,  viz.,  to  signal  the 
engine-driver  to  stop,  and  then  get  down  and  make  the  coupling  from 
the  ground,  which  he  could  have  done;  that  there  was  no  negligence  on 
the  part  of  the  defendants;  and  no  evidence  to  sustain  such  of  the  find- 
ings of  the  jury  as  were  in  favour  of  the  plaintiff. 

Per  Moss,  C.J.O. : — The  obligation  of  sub-sec.  (5)  of  sec.  264  of  the  Rail- 
way Act  is  confined  to  cars  “of  the  company;”  and  the  absence  of  end 
ladders  on  thp  Wabash  car  was  not  a contravention  of  the  obligation. 

The  following  statement  of  the  facts  is  taken  from  the  judg- 
ment of  Moss,  C.J.O. : — 

This  is  an  appeal  by  the  defendants  from  a judgment  entered 
by  the  Chancellor  of  Ontario,  upon  the  answers  of  the  jury  at  the 
trial,  awarding  the  plaintiff  $6,000  damages  for  injuries  received 
while  in  the  defendants’  employment  as  a brakesman.  The  plain- 
tiff was  endeavouring  to  effect  a coupling  between  two  box  freight 
cars,  at  or  near  Bolton  Junction,  a station  on  one  of  the  defendants’ 
lines  of  railway,  and,  while  doing  so,  was  either  shaken  off  or  fell 
from  a ladder  affixed  to  the  side  and  close  to  the  end  of  the  car 
upon  which  he  was  riding,  and  one  of  the  wheels  passed  over  his 
right  arm,  necessitating  amputation.  The  box  freight  car  in 
question  was  not  the  property  of  the  defendants,  but  had  been 
received  and  was  being  hauled  over  their  lines  under  the  inter- 
change of  traffic  provisions  of  the  Railway  Act.  It  had  been  re- 
ceived by  the  defendants  at  Detroit  from  the  Wabash  Railroad 
Company  on  the  14th  March,  1911,  loaded  with  merchandise 
for  various  points  on  the  defendants’  lines  of  railway,  and  on  the 
18th  March  it  was  in  course  of  return  to  Detroit,  via  Toronto 
Junction,  as  part  of  one  of  the  defendants’  regular  way-freight 
trains,  when  the  accident  happened. 

The  plaintiff  attributes  the  accident  to  three  causes:  (a)  the 
la  der  being  defective  because  the  lowest  step,  or  the  step  which 
was  placed  below  the  bottom  of  the  car,  was  not  joined  to  the  rest 
of  the  ladder,  but  was  separate  and  attached  to  the  bottom 
timbers  of  the  car,  and  was  loose  and  insecure;  (b)  there  was  no 
ladder  on  the  end  of  the  car  close  to  where  the  side  ladder  was; 
and  (c)  the  coupling-rod  used  for  controlling  the  action  of  auto- 
matic couplers,  when  about  to  effect  a coupling  of  cars,  did  not 
extend  outward  from  the  couplers  to  the  side  of  the  car,  or  within 
a short  distance  from  it,  but  was  so  short  as  to  necessitate  the  going 
in  between  the  cars,  or  at  all  events  to  render  it  necessary  to  reach 
\€iy  far  beyond  the  side  of  the  car  in  order  to  get  hold  of  it. 


XXVI. 


ONTARIO  LAW  REPORTS. 


123 


The  defendants  denied  all  liability,  and  witnesses  were  ex- 
amined on  both  sides.  At  the  conclusion  of  the  plaintiff’s  case, 
counsel  for  the  defendants  moved  for  judgment  on  the  ground 
that  no  case  of  negligence  had  been  shewn,  but  the  learned  Chan- 
cellor declined  to  withdraw  the  case  from  the  jury.  The  motion 
was  renewed  at  the  conclusion  of  the  whole  case  and  again  denied. 

The  learned  Chancellor  submitted  to  the  jury  a number  of 
questions  which  with  the  answers  returned  are  subjoined,  viz. : — 

1.  Was  the  car  in  question  owned  by  the  C.P.R.  or  by  another 
company?  A.  Owned  by  another  company. 

2.  Was  the  car  and  its  fittings  reasonably  safe  for  the  employees 
of  the  C.P.R. , in  the  usual  operations  of  the  road?  A.  We  think 
not. 

3.  Was  the  plaintiff,  having  regard  to  all  the  circumstances,  in 
his  method  of  arranging  the  gear  for  coupling  the  cars,  acting 
according  to  good  and  proper  practice?  A.  Not  having  received 
circular  No.  4,  we  think  he  acted  to  the  best  of  his  knowledge. 

4.  If  not,  wherein  did  he  err? 

5.  Was  the  plaintiff  injured  in  consequence  of  any  defect  in  the 
make-up  of  the  car?  A.  Yes,  in  our  opinion  we  think  he  was. 

6.  If  he  was  so  injured,  state  everything  which  you  find  to  be 
wrong.  A.  The  car  in  question  lacked  the  ladder  on  end  of  car 
and  long  lever  equipment  used  by  C.P.R.,  in  which  company  he 
was  employed. 

7.  Could  the  plaintiff,  by  the  exercise  of  reasonable  care,  have 
provided  for  the  coupling  of  the  cars  with  safety  to  himself? 
A.  In  our  opinion,  not  under  the  circumstances. 

8.  Do  you  find  negligence  as  to  the  matters  in  dispute? 

(a)  In  the  C.P.R.? 

(b)  In  the  plaintiff? 

(c)  Or,  in  both  of  them? 

9.  If  so,  state  briefly  what  was  the  negligence  in  each  case. 

10.  If  the  plaintiff  is  entitled  to  damages,  state  how  much.  The 

jury  have  agreed  on  $6,000  for  damages  for  plaintiff. 

Upon  the  answers  judgment  was  entered  for  the  plaintiff  for 

$6,000. 

The  defendants  now  appeal,  contending  that  the  plaintiff  is 
not  entitled  to  recover  damages  against  the  defendants;  that,  if 
entitled  to  any  judgment,  the  damages  should  be  limited  to  the 


C.  A 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 


124 


ONTARIO  LAW  REPORTS. 


[VOL. 


0.  A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 


amount  recoverable  under  the  Workmen’s  Compensation  for  In- 
juries Act;  and  that,  in  any  event,  the  damages  awarded  are 
excessive. 

January  18  and  19.  The  appeal  was  heard  by  Moss,  C.J.O., 
Garrow,  Maclaren,  Meredith,  and  Magee,  JJ.A. 

7.  F.  Hellmuth,  K.C.,  and  Angus  MacMurchy,  K.C.,  for  the 
defendants.  The  learned  trial  Judge  should  have  given  effect 
to  the  motion  for  nonsuit  at  the  close  of  the  plaintiff’s  case,  or  at 
least  upon  the  whole  case  he  should  have  told  the  jury  that  no 
liability  had  been  made  out.  There  was  no  breach  of  any  statute 
by  the  defendants.  Unless  the  provisions  of  sec.  264  of  the 
Railway  Act,  R.S.C.  1906,  ch.  37,  apply,  there  appears  to  be  no 
rule  against  the  transport  of  foreign  box  freight  cars.  The  car  in 
question  was  not  in  contravention  of  that  section.  It  was  re- 
ceived in  the  ordinary  course  of  the  obligation  to  interchange 
traffic,  imposed  by  sec.  317  of  the  Railway  Act,  and  was  properly 
inspected.  The  evidence  shewed  that  the  accident  was  caused, 
not  by  the  negligence  of  the  defendants,  but  by  that  of  the  plain- 
tiff, and  that  he  was  the  author  of  his  own  injury.  His  position 
on  the  ladder  was  not  a proper  one,  and  was  an  unauthorised  and  a 
dangerous  one.  He  should  have  signalled  the  engine-driver  to 
stop,  and  then  got  down  and  made  the  coupling  from  the  ground. 
At  any  rate,  the  jury  by  their  answers’  have  not  directly  found 
the  defendants  guilty  of  negligence,  though  they  have  found  that 
the  Wabash  car  was  defective.  There  was  no  evidence  on  which  a 
jury  could  reasonably  find  that  the  alleged  defects  pointed  to  in 
the  answers  to  questions  5 and  6 were  the  proximate  cause  of  the 
accident.  There  was  no  evidence  to  justify  the  answer  to  ques- 
tion 7.  There  was  neither  statutory  nor  common  law  liability. 
In  any  event  the  damages  are  excessive. 

A.  E.  H.  Creswicke , K.C.,  and  Christopher  C.  Robinson , for  the 
plaintiff.  The  judgment  below  should  be  affirmed.  The  findings 
of  the  jury  which  bear  upon  the  questions  of  negligence  and  con- 
tributory negligence  are  amply  supported  by  the  evidence,  and 
should  not  be  disturbed.  The  evidence  and  findings  of  the  jury 
shew  clearly  that  the  defendants  were  guilty  of  a breach  of  their 
statutory  duty  under  the  Railway  Act,  and  that  such  breach  was 
the  cause  of  the  accident.  See  sec.  264  (c),  and  sub-sec.  5;  Durant 
v.  Canadian  Pacific  R.W.  Co.  (1909),  13  O.W.R.  316;  Scott  v. 


XXVI.  ] 


ONTARIO  LAW  REPORTS. 


125 


Canadian  Pacific  R.W.  Co.  (1909),  19  Man.  L.R.  165.  In  every- 
thing but  the  ladders,  the  Act  deals  with  the  train,  the  ladders 
being  dealt  with  in  reference  to  “cars.”  Therefore,  the  statute 
applies  to  the  coupler,  whether  the  cars  are  foreign  or  not.  In 
reference  to  sec.  256  of  the  Railway  Act,  see  Atcheson  v.  Grand 
Trunk  R.  W.  Co.  (1901),  1 O.L.R.  168,  and  MacMurchy  and 
Denison’s  Railway  Law  of  Canada,  2nd  ed.,  p.  410.  As  to  secs. 
284  and  317,  no  company  is  bound  to  accept  cars  unless  properly 
equipped:  Richardson  v.  Great  Eastern  R.W.  Co.  (1876),  1 C.P.D. 
342.  On  the  question  of  contributory  negligence,  we  submit 
that  on  a plea  of  “not  guilty  by  statute”  that  question  is  not 
open.  Doan  v.  Michigan  Central  R.W.  Co.  (1890),  17  A.R.  481, 
is  not  conclusive.  The  jury  have  found  against  contributory 
negligence:  Canadian  Northern  R.W.  Co.  v.  Anderson  (1911), 
45  S.C.R.  355. 

Hellmuth,  in  reply.  We  are  not  obliged  to  plead  contributory 
negligence. 


C.  A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 


April  4.  Moss,  C.J.O.  (after  setting  out  the  facts  as  above) : — 
Upon  all  the  facts  disclosed  in  evidence,  and  having  regard  to  the 
circumstances  under  which  the  plaintiff  met  with  the  injury,  I 
think  that,  if  I had  tried  the  case  without  a jury,  I should  have 
had  no  hesitation  in  holding  that  the  plaintiff  had  not  succeeded 
in  fastening  liability  upon  the  defendants.  But,  the  case  having 
been  submitted  to  the  jury,  and  their  answers  to  the  questions 
being  now  before  us,  there  arise  for  consideration  the  questions: 
(a)  whether  there  was  evidence  proper  to  submit  to  the  jury  upon 
the  questions  of  negligence  on  the  part  of  the  defendants;  and,  if 
so,  (b)  whether,  upon  the  answers,  judgment  should  not  have  been 
entered  for  the  defendants. 

The  plaintiff,  a young  man  twenty-two  or  twenty-three  years 
of  age,  who  had  been  for  over  five  years  in  the  employment  of  the 
Canadian  Express  Company,  but  in  what  capacity  does  not  appear, 
though  it  may  be  inferred  that  it  was  work  in  connection  with 
railways,  and  was  subsequently  employed  by  the  Grand  Trunk 
Railway  Company  as  a brakesman  for  six  months,  entered  the 
defendants’  employment  as  a spare  brakesman  on  the  20th  August, 
1910,  and  continued  in  that  capacity,  though  not  engaged  all  the 
time  in  actual  work,  until  the  date  of  the  accident,  on  the  18th 


126 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 

Moss,  C.J.O. 


March,  1911.  On  that  day  he  was  engaged  as  brakesman  on  a 
freight  train  with  the  box  freight  car  in  question  as  one  of  the  cars. 
At  Bolton  Junction  it  was  necessary  to  detach  a car  which  was  to 
be  left  there,  and  it  was  cut  out  by  means  of  a running  shunt. 
After  performing  that  and  some  other  operations,  the  next  step 
was  to  unite  the  remainder  of  the  cars,  which  were  to  go  on  to 
Toronto  Junction.  The  car  in  question — called  the  Wabash  car — 
was  to  couple  with  a car  some  distance  from  it  on  the  line.  The 
plaintiff,  as  his  duty  required,  went  upon  the  roof  to  signal  the 
engineer  to  back  down  to  the  other  car.  When  the  engine  was 
moving  the  Wabash  car  down  towards  the  other  car,  the  plaintiff, 
according  to  his  testimony,  observed  that  the  coupler  on  it  was 
closed — that  is,  that  the  knuckle  was  not  in  a position  to  effect 
a coupling  with  the  Wabash  car  unless  the  knuckle  or  its  coupler, 
which  was  also  closed,  was  opened. 


In  order  to  open  this  knuckle,  the  plaintiff  went  down  the  ladder 
on  the  side  of  the  Wabash  car,  near  the  end  which  was  approach- 
ing the  other  car,  with  the  intention  of  getting  hold  of  the  lever 
or  coupler-rod  by  which  the  knuckle  was  opened  or  closed,  and 
by  lifting  it  thereby  open  the  knuckle  so  as  to  receive  the  coupler 
of  the  other  car.  He  went  to  the  bottom  step,  and,  with  his  left 
foot  resting  on  it,  and  holding  on  to  the  lowest  rung  of  the  ladder 
with  his  left  hand,  and  with  his  right  foot  hanging  down  and 
swinging  in  the  air,  he  endeavoured  to  reach  around  the  end  of  the 
car  to  the  lever  or  coupler-rod.  This  lever  was  connected  with 
the  top  of  the  coupler,  with  the  rod  projecting  towards  the  side 
of  the  car  on  which  the  plaintiff  was.  While  he  was  in  this  position, 
the  car,  moving  at  the  rate  of  about  seven  miles  an  hour,  passed 
over  a crossing  of  two  tracks,  and  the  jar  caused  his  foot  to  slip 
from  the  bottom  step,  and  he  fell  with  his  arm  under  the  wheels.  In 
his  evidence  he  said  that  the  lever-rod  projected  only  some  fifteen 
or  sixteen  inches  from  the  coupler,  which  was  about  four  feet  from 
the  side  of  the  car,  so  that  the  end  was  about  thirty-two  or  thirty- 
three  inches  from  the  side  of  the  car  where  he  was.  He  further 
said  that  the  bottom  step  was  about  eleven  inches  in  width,  and 
was  loosely  and  insecurely  fastened  to  the  bottom  timber  of  the 
car,  besides  not  being  under  the  ladder  but  to  one  side  of  it,  and 
that  the  side  which  was  the  furthest  from  the  end  of  the  car.  In 
all  these  respects  the  testimony  adduced  by  the  defendants  amply 


XXVI.] 


ONTARIO  LAW  REPORTS. 


127 


and  satisfactorily  displaced  the  plaintiff’s  contentions.  But,  as 
the  case  stood  at  the  end  of  the  plaintiff’s  case,  the  learned  Chan- 
cellor could  not  have  withdrawn  it  from  the  jury  if  the  defendants’ 
negligence  rested  upon  proof  of  these  facts.  It  was  admitted  that 
the  Wabash  car  had  not  ladders  on  the  ends,  as  required  by  sec. 
264  (5)  of  the  Railway  Act.  The  plaintiff,  in  examination  in 
chief,  stated  that,  had  there  been  a ladder  at  the  end  of  the  car, 
he  would  have  gone  down  it,  and  endeavoured  to  make  the  coup- 
ling. But  on  cross-examination  he  admitted  that  it  was  not  good 
railway  practice  to  go  down  between  the  ends  of  two  cars  to  make 
a coupling  when  the  car  was  in  motion — but,  he  said,  “you  see  it 
done  every  day.”  It  is  manifest  that  such  a practice  is  not  only 
dangerous  but  is  directly  opposed  to  the  policy  of  the  law  as  de- 
clared by  sec.  264  (c)  of  the  Act.  He  also  suggested  that,  if  the 
ladder  had  been  at  the  end,  he  might  have  saved  himself  from  fall- 
ing, by  catching  it;  bu,t  it  is  difficult  to  suppose  that  he  could 
have  seriously  believed  that  that  was  one  of  the  purposes  for  which 
a ladder  is  required  on  each  end  of  a car.  It  was  not,  however, 
proved  or  admitted  during  the  plaintiff’s  case  that  the  car  was  not 
the  property  of  the  defendants.  And,  assuming  it  to  have  been 
the  defendants’  property,  there  were  the  questions  whether  it 
was  fitted  with  couplers  and  ladders  as  required  by  sec.  264,  and 
whether  the  failure  to  provide  them  was  the  cause  of  the  accident, 
or  whether  it  was  due  to  the  plaintiff’s  own  want  of  care  or  failure 
to  observe  the  usual  and  proper  modes  of  making  the  coupling. 
The  plaintiff  admitted  that  the  proper  course  would  have  been 
to  signal  the  engine-driver  to  stop,  and  then  get  down  and  make  the 
coupling  from  the  ground,  which  he  could  have  done.  He  excused 
himself  by  saying  that  he  was  on  the  fireman’s  side  of  the  car, 
and  that  the  engine-driver  was  not  looking,  and  so  he  (the  plain- 
tiff) could  not  give  any  signal. 

Upon  the  whole,  although  scanty,  there  was  enough  at  the 
close  of  the  plaintiff’s  case  to  justify  the  refusal  to  enter  judgment 
for  the  defendants.  But  at  the  close  of  the  whole  case,  when  it  had 
been  proved,  and  indeed  admitted,  that  the  car  was  not  the  de- 
fendants’ property,  but  was  owned  by  the  Wabash  or  some  other 
company,  other  questions  arose  as  to  the  liability  of  the  defend- 
ants for  the  failure  of  this  car  to  comply  with  all  the  requirements 
of  sec.  264,  applicable  to  couplers  and  ladders  on  box  freighters. 


0.  A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 

Moss,  C.J.O. 


128 


ONTARIO  LAW  REPORTS. 


[VOL. 


0.  A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 

Moss,  C.J.O. 


The  car  had  been  received  in  the  ordinary  course  of  the  obligation 
to  interchange  traffic,  imposed  by  sec.  317  of  the  Railway  Act. 
It  had  been  inspected  in  due  course  and  passed  in  accordance 
with  the  ordinary  practice,  by  inspectors  whose  competency  was 
not  questioned.  Many  hundreds  of  box  freight  cars  without 
ladders  on  each  end  are  received  and  passed  daily,  entering  Canada 
from  the  United  States.  It  is  shewn  that  there  is  no  rule,  statutory 
or  otherwise,  requiring  that  there  shall  be  ladders  on  the  ends  as 
well  as  on  the  sides  of  box  freight  cars  used  on  railways  operated 
in  the  United  States.  The  car  was  provided  with  automatic 
couplers,  but  the  complaint  is  as  to  the  length  of  the  lever,  or 
coupling-rod.  There  is  no  express  provision  in  the  Railway  Act 
prescribing  the  length  of  the  lever,  but  the  testimony  for  the  de- 
fendants shewed  that  the  end  of  the  lever  on  the  car  extended  to 
within  fifteen  or  sixteen  inches  of  the  side,  instead  of  thirty-two 
of  thirty-three  inches,  as  .the  plaintiff  stated.  The  modern 
Canadian  lever  is  made  to  extend  out  to  the  side,  or  to  within  at 
least  eight  inches;  but  cars  from  the  United  States,  with  the  end 
of  the  lever  fifteen  or  sixteen  inches  from  the  side,  are  admitted 
and  passed  in  the  usual  and  ordinary  course  of  inspection.  Unless 
the  provisions  of  sec.  264  apply,  there  appears  to  be  no  statutory 
or  other  rule  against  the  transport  of  foreign  box  freight  cars, 
although  they  do  not  comply  in  every  respect  with  the  Railway 
Act. 


Section  264  (1)  enacts  that  “every  company  shall  provide 
and  cause  to  be  used  on  all  trains  modern  efficient  apparatus, 
appliances  and  means,  ...(c)  to  securely  couple  and 
connect  the  cars  composing  the  train,  and  to  attach  the  engine 
to  such  train,  with  couplers  which  couple  automatically  by  im- 
pact, and  which  can  be  uncoupled  without  the  necessity  of  men 
going  in  between  the  ends  of  the  cars.”  Assuming  the  expression 
“and  cause  to  be  used”  to  comprehend  foreign  cars  in  transport 
over  the  defendants7  lines,  the  car  in  question  was  not  open  to 
objection  for  any  defect  in  the  above-mentioned  respects. 

Sub-section  (5)  enacts  that  “all  box  freight  cars  of  the  company 
shall,  for  the  security  of  railway  employees,  be  equipped  with, 
— (a)  outside  ladders,  on  two  of  the  diagonally  opposite  ends  and 
sides  of  each  car,  projecting  below  the  frame  of  the  car,  with  one 
step  or  rung  of  each  ladder  below  the  frame,  the  ladders  being 


XXVI.] 


ONTARIO  LAW  REPORTS. 


129 


placed  close  to  the  ends  and  sides  to  which  they  are  attached.” 
The  car  in  question  had  not  ladders  on  the  ends,  but  it  was  not 
a car  “of  the  company.”  There  is  a distinction  drawn  between 
the  couplers  to  be  used  on  all  trains,  and  the  equipment  of  box 
freight  cars  with  ladders.  The  obligation  with  regard  to  the  latter 
is  confined  to  cars  of  the  company.  The  car  was,  therefore,  not 
in  contravention  of  the  sub-section.  Even  if  the  contrary  were 
the  case,  it  is  clear  that  their  absence  in  no  way  contributed  to 
the  accident  which  befell  the  plaintiff.  I think  that,  upon  the 
whole  case,  the  jury  should  have  been  told  that  no  case  appeared 
upon  which  they  could  reasonably  find  that  the  defendants  were 
negligent,  and  that  no  case  of  liability  had  been  made  out;  and 
that  the  action  should  have  been  dismissed. 


C.  A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 

Moss,  C.J.O. 


Assuming,  however,  that  it  was  proper  to  submit  the  case 
to  the  jury,  is  the  plaintiff  entitled  to  judgment  upon  the  answers 
returned  to  the  questions?  It  is  to  be  observed,  in  the  first  place, 
that  the  j ury  failed  to  return  answers  to  the  very  pointed  and  ma- 
terial question  on  the  head  of  negligence  contained  in  No.  8. 
But  they  answer  the  very  general  question  No.  2,  “Was  the  car 
and  its  fittings  reasonably  safe  for  the  employees  of  the  C.P.R. 
in  the  usual  operations  of  the  road?”  which  is  not  directly  pointed 
at  the  alleged  defects  leading  to  the  injury,  and  a negative  answer 
to  which  is  not  a finding  of  negligence  on  the  part  of  the  de- 
fendants. 


The  answers  to  questions  4 and  5 bear  more  directly  on  the 
question.  They  attribute  the  plaintiff’s  injury  to  the  fact  that 
the  car  in  question  lacked  the  ladder  on  the  end  of  the  car  and  the 
long  lever  attachment  used  by  the  defendants  in  their  cars.  But 
there  is  no  evidence  upon  which  a jury  could  reasonably  find  that 
these  alleged  defects  were  the  proximate  cause  of  the  accident. 
The  plaintiff  was  endeavouring  by  using  the  side  ladder  not  as  a 
means  of  descending  the  ladder  to  the  ground  and  there  effecting 
the  coupling,  as  he  admits  was  the  proper  course,  but  for  the  pur- 
pose of  enabling  him,  by  using  the  lowest  step  as  a foothold  and 
crouching  with  his  body  in  a strained  and  awkward  position,  to 
effect  the  coupling,  without  stopping  the  car  or  getting  down  to 
the  ground.  The  position  was  admittedly  an  improper,  and  cer- 
tainly a very  dangerous,  one,  not  authorised  to  be  taken.  The 
method  adopted  by  the  plaintiff  to  endeavour  to  effect  the  coupling 


130 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 

Moss.  C.J.O. 


[VOL. 

was  the  very  one  most  calculated  to  expose  him  to  danger  and 
risk  of  injury.  And  there  is  no  evidence  to  justify  the  answer 
of  the  jury  to  the  7th  question,  an  answer  which,  in  its  terms,  is 
inconclusive  and  unsatisfactory.  There  were  no  “ circum- 
stances ” to  prevent  the  plaintiff  from  adopting  the  perfectly  safe 
course  which  he  admits  he  might  have  done. 

Having  regard  to  the  evidence  in  the  case,  I do  not  think  the 
answers  sufficient  to  support  the  judgment  entered  for  the  plaintiff ; 
and  I think  that,  notwithstanding  them,  judgment  should  have  been 
entered  dismissing  the  action. 

The  appeal  should  be  allowed,  and  the  action  dismissed,  with 
costs  if  exacted. 

Garrow  and  Maclaren,  JJ.A.,  concurred. 

Meredith,  J.A.: — A good  deal  that  has  been  said  and  done 
in  this  case  seems  to  me  to  have  quite  missed  the  mark  which 
should  have  been  arrived  at;  for  instance,  all  of  that  branch  of  it 
which  deals  with  the  requirements  of  the  statute-law  regarding 
ladders  at  the  ends  of  “box  freight  cars.”  It  can  make  no  differ- 
ence whether  there  was  any  such  requirement  in  respect  of  the 
“Wabash”  car,  from  which  the  plaintiff  fell,  or,  if  so,  whether  that 
obligation  was  imposed  upon  the  company  that  owned  the  car, 
or  upon  the  company  who  were  using  it  in  the  carriage  of  their 
freight,  or  upon  the  defendant  company,  who  had  received 
and  were  forwarding  it  as  interchanged  freight  only,  if, 
as  I think,  it  is  incontrovertible  that  the  ladder  was  not  required 
to  be  provided  for  the  work  in  which  the  plaintiff  was  engaged 
when  he  fell  and  was  hurt;  but,  on  the  contrary,  that,  if  he  had 
made  use  of  any  such  ladder  for  such  a purpose,  he  would  have 
misused  it,  contrary  to  the  provisions  of  the  enactment  in  question, 
against  the  wishes  and  interests  of  his  masters,  against  his  own 
interests,  and  against  the  first  instincts  of  all  animals — self-preserva- 
tion. If  he  had  fallen  from  such  a ladder  as  he  did  from  the  one 
in  question,  his  life,  not  only  one  hand,  would  have  paid  the  pen- 
alty. 

It  is  quite  obvious  to  any  one  who  has  not  had,  as  the  plaintiff 
had,  six  years’  experience  in  railway  matters  as  a brakesman  and 
otherwise,  that  it  is  dangerous  to  go  between  cars  of  any  train, 
and  extremely  so  if  they  are  in  motion;  and  it  is  equally  obvious 


XXVI.] 


ONTARIO  LAW  REPORTS. 


131 


that  that  risk  should  not  be  taken  in  any  case  in  which  it  can  rea- 
sonably be  avoided;  quite  obvious  that  it  is  against  the  interests 
of  him  who  does  it,  of  his  relatives  and  friends,  and  of  his  employ- 
ers, as  well  as  against  the  public  interests,  that  risk  of  life  or  limb 
should  be  undertaken  when  there  is  no  occasion  for  it. 

As  to  his  experience,  he  tells  of  it  in  these  words: — 

“Q.  You  have  had  no  experience  in  railway  matters  before 
you  went  into  the  employ  of  the  C.P.R.?  A.  Yes,  sir. 

“Q.  To  what  extent?  What  was  your  experience?  A.  I had 
been  with  the  Canadian  Express  Company  for  about  five  or  six 
years,  and  I was  with  the  Grand  Trunk  as  brakesman. 

“Q.  Passenger  brakesman  or  freight?  A.  Passenger  and 
freight  both. 

“Q.  Then  your  experience  up  to  the  time  you  quit  their 
employ  would  be  about  five  or  six  years,  would  it?  A.  Yes, 
about  six  years.” 

In  the  same  section  of  the  Railway  Act  in  which  the  require- 
ment as  to  the  ladders  is  contained,  it  is  expressly  and  plainly 
required,  in  the  interests  and  for  the  safety  of  just  such  men  as  the 
plaintiff,  that  automatic  couplers,  “which  can  be  uncoupled 
without  the  necessity  of  men  going  in  between  the  ends  of  the 
cars,”  shall  be  provided,  and  used,  upon  cars  such  as  that  in  ques- 
tion. So  that,  if  such  couplers  are  provided,  what  possible  excuse 
can  there  be  for  going  between  the  cars  to  uncouple  them,  not  to 
speak  of  going  between  them  and  doing  the  work  on  a perpendicu- 
lar box  car  ladder,  without  any  sort  of  reason  for  not  doing  that 
work  from  without  the  cars? 

It  seems  to  have  been  thought  necessary,  by  a learned  Judge, 
to  say  that  you  cannot  have  damages  for  injury  to  a finger  in  the 
closing  of  a passenger  carriage  door,  merely  because  the  head- 
light of  the  engine,  which  was  drawing  the  train,  was  not  burning 
when  it  should  have  been;  and  so  it  seems  to  me  to  be  necessary 
to  repeat  somewhat  frequently  the  observation  that  one  cannot 
have  damages  for  any  negligence  which  is  not  the  proximate  cause 
of  the  injury. 

So  that  really  this  case  depends  entirely  upon  the  two  ques- 
tions: (1)  whether  the  defendants  were  guilty  of -any  negligence  in 
respect  of  the  kind  of  brake  which  the  plaintiff  was  attempting  to 
uncouple  only;  and,  if  so,  (2)  whether  that  negligence  was,  or 


C.  A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 

Meredith,  J.A. 


132 

C.  A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 

Meredith,  J.A. 


ONTARIO  LAW  REPORTS.  [vol. 

whether  the  plaintiff’s  want  of  care  in  whole  or  in  part  was,  the 
cause  of  his  injury. 

The  jury  have  not  found  any  negligence  in  the  defendants; 
it  would  be  very  hard  to  see  how  they  could.  The  question  was 
pointedly  put  to  them.  The  substance  of  their  findings,  in  so  far 
as  they  affect  this  case,  is,  that  the  “Wabash”  car  was  “defective” 
in  not  having  “the  ladder  on  the  end  of  the  car  and  long  lever 
equipment,”  such  as  the  defendants  have  upon  their  own  cars; 
and  that,  in  consequence  of  such  defects,  the  plaintiff  was  injured. 

The  findings  are  not  very  consistent,  for,  if  the  ladder  which 
was  not  provided  had  been  provided,  and  if  the  plaintiff  had  used 
it,  he  would  have  had  no  need  of  a long  lever  uncoupling  rod. 
His  testimony  is,  that,  if  there  had  been  a ladder  at  the  end  of  the 
car,  he  would  have  used  it  in  uncoupling.  A longer  rod  might 
have  made  the  task  of  uncoupling  from  the  side  ladder  somewhat 
easier;  but  possibly  less  so  from  an  end  ladder;  the  lengthened 
rod  is  to  enable  doing  the  work  without  going  between  the  cars. 

But  there  is  no  evidence  that  the  uncoupling  rod  did  not  fully 
comply  with  the  requirements  of  the  statute,  and  no  finding  that 
it  did  not;  how  then  can  the  judgment  be  sustained?  And,  as 
I have  before  mentioned,  there  is  no  finding  of  negligence  on  the 
part  of  the  defendants;  and,  if  there  had  been,  there  is  no  evidence 
whatever  to  support  such  a finding;  the  plaintiff’s  case  seems  to 
me  to  be  hopeless  in  this  respect;  indeed,  it  may  be  that  the  re- 
quirements of  the  enactment,  in  this  respect,  are  all  that  the  law 
can  require  from  any  company  subject  to  its  provisions,  whichever 
company  may  be  the  one  to  which  it  applies,  if  it  does  not  apply 
to  more  than  one  of  the  companies  concerned  in  the  making  and 
the  movement  of  the  car  in  question. 

In  addition  to  all  this,  it  seems  to  me  to  be  impossible  for  any' 
reasonable  man  to  say,  conscientiously,  that  the  plaintiff’s  injury 
was  not  caused  altogether  by  his  own  negligence;  and  considerably 
less  than  that  would  deprive  him  of  any  right  to  recover. 

The  statute-law,  passed  for  the  especial  benefit  of  persons 
engaged  in  car  coupling  and  uncoupling,  as  a brakesman  especially 
is,  shews  the  impropriety  of  uncoupling  in  any  manner  making  it 
necessary  to  go  between  the  cars  for  that  purpose.  If  the  plaintiff 
were  a novice  complaining  of  being  put  at  dangerous  work  without 
proper  instructions,  the  case  might  be  different;  but  he  was  a 


XXVI.] 


ONTARIO  LAW  REPORTS. 


133 


man  of  six  years’  experience  “in  railway  matters;”  and  is  without 
any  sort  of  excuse  for  adopting  the  extraordinary  method  which 
he  was  employing  when  injured.  I cannot  but  think  it  likely  to 
bring  legal  methods  into  conflict  with  the  commonest  of  common 
sense  if  it  can  be  lawfully  determined  that  the  plaintiff  was  acting 
properly  in  endeavouring  to  uncouple  cars  in  motion,  from  a ladder 
on  the  side  of  the  car,  too  far,  according  to  his  testimony,  from  the 
end  of  it,  and,,  according  to  the  same  testimony,  with  a foot-hold 
too  shallow  and  not  wide  enough  to  get  both  his  feet  into,  and 
shaky  at  that,  with  a coupler  rod  too  short  to  be  operated  without 
danger;  and  while  supported  by  one  foot  only  upon  the  loose 
step,  and  one  hand  only  upon  the  rung  of  the  ladder  next  above 
that  in  which  his  foot  was,  and  only  about  twenty  inches  apart, 
and  then  making  an  unduly  long  reach  around  the  end  of  the  car 
with  his  right  hand  to  uncouple;  when  there  was  absolutely  no 
need  of  attempting  it,  and  when  so  doing  was  in  the  teeth  of  the 
interest  of  every  one,  as  before-mentioned,  as  well  as  of  the  enact- 
ment already  referred  to. 


C.A. 

1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 

Meredith,  J.A. 


It  was  suggested  that  the  plaintiff  should  have  our  sympathy, 
however  unwisely  he  may  have  acted,  because,  it  was  said,  he 
was  taking  the  risk  in  his  masters’  interests  and  for  their  benefit; 
the  first  part  of  the  proposition  I assent  to,  provided  however 
that  such  sympathy  does  not  warp  the  judgment;  the  latter  part 
is  obviously  erroneous;  there  is  no  kind  of  evidence  of  over-zeal 
on  the  plaintiff’s  part  in  his  masters’  service;  as  I have  intimated, 
he  did  that  which  was,  and  he  must  have  known  was,  against  the 
interests  of  every  one  because  of  the  danger  of  it;  he  knew  that 
every  one’s  interest  required  that  the  uncoupling  should  be  done 
from  the  ground  without  going  between  the  cars  and  when  they 
were  not  in  motion,  and  that  there  was  no  sort  of  reason  why 
that  course  should  not  be  taken;  but  familiarity  with  danger 
breeds  contempt  of  it,  and  he  is  not  the  only  man  who  would  not 
hesitate  to  take  the  risk  rather  than  take  the  additional  trouble 
to  stop  the  train  and  get  down  and  uncouple  and  get  up  again; 
for,  after  all,  the  risk  might  be  undertaken  a good  many  times 
without  a fall,  and  a good  many  falls  might  happen  without 
getting  any  part  of  one’s  body  under  the  wheels;  and  he  is  not  the 
only  man  who  is  willing  to  make  the  trip’s  work  as  short  as  possible 
and  to  be  home  again  as  soon  as  possible. 


134 


ONTARIO  LAW  REPORTS. 


[VOL. 


0.  A 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 

Meredith,  J.A. 


The  jury  have  hedged  themselves  in,  with  a shifty  answer, 
from  the  untrue  finding  that  the  plaintiff  could  not,  by  the  exercise 
of  reasonable  care,  have  uncoupled  the  cars  in  safety:  “In  our 
opinion,  not  under  the  circumstances;”  and  they  quite  dodged 
the  question  whether  that  which  the  plaintiff  was  trying  to  do 
when  he  fell  was  “according  to  good  and  proper  practice,”  mean- 
ing, I suppose,  was  it  a proper  method  of  uncoupling  the  cars? 
The  jury  should  have  been  asked  what  they  meant  by  “under 
the  circumstances;”  if  under  the  circumstances  of  standing  on 
the  ladder  as  he  was  and  attempting  to  do  the  work  in  that  way — 
if  they  assume  that  that  was  proper — there  might  be  some  justi- 
fication for  the  answer;  but  that  would  be  entirely  begging  the 
question. 


I would  allow  the  appeal  and  dismiss  the  action. 


Magee,  J.A. : — The  plaintiff  was  brakesman  on  top  of  a freight 
car,  at  the  rear  of  a train  which  was  being  pushed  back  to  be 
coupled  to  another  car  which  was  stationary.  Both  cars  had 
automatic  couplers — but  in  order  to  couple  it  is  necessary  that  the 
knuckle  of  one  or  other  shall  be  open.  He  noticed  that  both  were 
closed.  The  knuckle,  according  to  the  defendants’  witness 
Hawkes,  can  be  opened  by  the  operating  lever  of  a moving  car. 
To  reach  the  operating  lever  the  plaintiff  descended  the  only 
ladder  at  that  portion  of  the  car.  That  was  a ladder  on  the  side 
of  the  car,  which  appears  from  the  evidence  to  have  been  reasonably 
close  to  the  corner  or  end. 

It  is,  I think,  clear  from  the  evidence  that  it  was  customary 
for  brakesmen  to  operate  the  levers  from  the  ladders  while  the 
cars  were  moving.  It  had  been  done  only  a few  moments  before 
by  the  other  brakesman  opening  the  coupler  of  the  adjoining 
car  to  make  a flying  shunt.  The  conductor  says  it  was  quite 
customary,  and  he  would  not  think  of  reporting  a brakesman  for 
doing  it,  and  had  never  told  any  one  not  to  do  it.  The  general 
yard-master,  called  for  the  defendants,  states  that  the  lever  can 
be  operated  from  the  side-ladder. 

It  is  sought  to  draw  a distinction  between  operating  the  lever 
on  a moving  car  in  order  to  uncouple,  and  doing  so  in  order  to 
couple.  But  the  plaintiff  states,  and  he  is  not  contradicted  but 
indeed  borne  out  by  other  evidence,  that  he  had  plenty  of  time 


XXVI.] 


ONTARIO  LAW  REPORTS. 


135 


to  do  what  he  was  going  to  do  and  get  around  to  the  side  out  of  the 
way  before  the  cars  would  couple.  Really  all  he  proposed  doing 
was  operating  the  lever  on  a moving  car.  Nowhere  do  I find 
that  to  be  forbidden.  It  was  argued  that  this  was  contrary  to 
the  defendants’  circular  No.  4 of  the  15th  February,  1911,  which, 
however,  the  jury  find  the  plaintiff  not  to  have  had  notice  of. 
That  circular  forbids  “all  acts  familiarly  known  as  taking  chances,” 
and  it  calls  attention  to  accidents  which  had  occurred  “solely  by 
carelessness  on  the  part  of  some  employee,  such  as,”  inter  alia, 
“adjusting  coupler  . . . when  'cars  are  in  motion.”  But 

Mr.  Hawkes,  the  defendants’, yard-master,  expressly  states,  as 
one  might  expect,  that  opening  the  knuckle  by  the  operating  lever 
is  not  “adjusting  the  coupler.”  That  circular  naturally  enough 
puts  “adjusting  coupler”  in  the  same  category  with  “turning 
angle-cock  or  uncoupling  hosebags” — all  which  would  have  to 
be  done  by  going  between  the  cars  on  the  ground.  But  the 
circular  is  luminous  in  respect  of  several  operations.  Thus  it 
refers  to  “accidents  from  holding  on  side  of  car,”  but  only  “when 
passing  platform,  building,  or  other  obstruction  known  to  be  close 
to  track;”  “kicking  cars  into  sidings,”  but  only  where  other  cars 
are  standing;  and  “detaching  moving  cars”  without  first  seeing 
to  the  brakes  being  in  order.  This  last  instance  impliedly  recog- 
nises the  practice  of  detaching  moving  cars  if  only  the  brakes  are 
in  order.  The  plaintiff  was  injured  in  an  operation  not  a whit 
more  dangerous  than  those  which  are  here  impliedly  recognised, 
and  not  at  all  one  which  involved  the  danger  of  going  between 
cars. 


C.  A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W.  Co. 

Magee,  J.A. 


But  it  seems  to  me  that  the  plaintiff  was  not  warranted  in 
trying  to  work  the  lever  from  the  position  which  he  took,  that  is, 
holding  with  one  hand  the  very  lowest  rung  of  the  ladder  only 
fourteen  inches  above  the  edge  of  the  car,  with  one  foot  on  the  step, 
only  six  and  a half  inches  below  the  edge.  He  does  not  shew 
that  there  would  have  been  any  difficulty  in  reaching  the  lever 
while  grasping  a rung  higher  up.  Mr.  Hawkes  considers  it  quite 
feasible  to  have  done  so,  even  from  the  upper  rung,  which  I would 
doubt,  though  it  is  not  contradicted.  The  plaintiff  would  seem 
to  have  been  in  fact  inviting  disaster  by  attempting  to  reach  the 
lever  while  in  that  attitude.  There  was  no  compulsion  of  any 
sort  upon  him  to  do  so,  either  from  fear  of  injury  to  his  employers’ 


136 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Stone 

v. 

Canadian 
Pacific 
R.  W Co. 

Magee,  J.A. 


property  or  otherwise.  It  is  simply  a case  of  unnecessary  over- 
balancing, so  far  as  appears — and,  however  much  one  may  feel 
sorry  for  his  injury,  it  cannot,  I think,  be  said  to  be  caused  by  the 
defendants’  negligence  or  breach  of  statutory  duty,  if  there  was 
such  duty  as  to  this  car  of  another  company. 

Appeal  allowed. 


1912 


[IN  THE  COURT  OF  APPEAL.] 


April  4. 


Rex  v.  Britnell. 

Criminal  Law — Exposing  for  Sale  or  Selling  Obscene  Books — Criminal  Code, 
sec.  207 — Conviction — Evidence — Knoioledge  of  Sale  and  of  Character 
of  Books. 


To  sustain  a conviction  under  sec.  207  of  the  Criminal  Code,  R.S.C.  1906, 
ch.  146,  as  amended  by  8 & 9 Edw.  VII.  ch.  9,  for  selling  or  exposing  for 
sale  obscene  books,  it  must  be  shewn  that  the  books  were  sold  or  exposed 
for  sale  with  the  knowledge  of  the  defendant,  and  that  he  knew  of  their 
obscene  character. 

And.  held,  upon  a case  stated  by  a Police  Magistrate,  that,  having  regard  to 
the  character  and  extent  of  the  defendant’s  business  and  to  his  reputa- 
tion as  a book-seller,  there  was  no  reasonable  evidence  upon  which  he 
might  be  convicted  of  having  knowingly  sold  or  exposed  for  sale  obscene 
books,  within  the  meaning  of  sec.  207. 


Case  stated  by  one  of  the  Police  Magistrates  for  the  City 
of  Toronto. 

The  defendant  was  convicted  upon  an  information  charging 
that,  in  the  month  of  April,  1911,  he,  the  defendant,  contrary 
to  law,  exposed  for  sale  and  sold  certain  indecent  and  obscene 
books,  tending  to  corrupt  public  morals,  contrary  to  the  form 
of  the  statute  in  such  case  made  and  provided. 

Section  207  of  the  Criminal  Code,  R.S.C.  1906,  ch.  146,  as 
amended  by  8 & 9 Edw.  VII.  ch.  9,  provides:  “Everyone  is  guilty 
of  an  indictable  offence  and  liable  to  two  years’  imprisonment 
who  knowingly,  without  lawful  justification  or  excuse, — (a) 
makes,  manufactures,  or  sells,  or  exposes  for  sale  or  to  public 
view,  or  distributes  or  circulates,  or  causes  to  be  distributed  or 
circulated,  or  has  in  his  possession  for  sale,  distribution  or  circu- 
lation, or  assists  in  such  making,  manufacture,  sale,  exposure, 
having  in  possession,  distribution  or  circulation,  any  obscene 
book  or  other  printed,  .typewritten  or  otherwise  written  matter, 
or  any  picture,  photograph,  model  or  other  object  tending  to 


XXVI. 


ONTARIO  LAW  REPORTS. 


137 


corrupt  morals,  or  any  plate  for  the  reproduction  of  any  such 
picture  or  photograph.” 

The  stated  case  was  as  follows: — 

“ Pursuant  to  the  order  of  the  Court  of  Appeal  dated  the 
15th  May,  1911,  I submit  the  following  questions  for  the  con- 
sideration of  the  Court: — 

“1.  Was  there  evidence  upon  which  the  defendant  might  be 
convicted  of  the  offence  of  selling  obscene  books,  within  the 
intent  and  meaning  of  sec.  207  of  the  Criminal  Code? 

“2.  Was  there  any  evidence  upon  which  the  defendant  might 
be  convicted  of  having  knowingly  sold  or  exposed  for  sale  obscene 
books,  within  sec.  207  of  the  Criminal  Code?” 

December  6,  1911.  The  case  was  heard  by  Moss,  C.J.O., 
G arrow,  Maclaren,  Meredith,  and  Magee,  JJ.A. 

George  Wilkie,  for  the  defendant,  argued  that  it  had  not 
been  proved  that  the  books  had  been  exposed  for  sale  or  that  they 
were  obscene,  or  that  they  were  sold  or  exposed  for  sale  with 
the  defendant’s  knowledge,  or  that  the  defendant  knew  of  their 
obscene  character.  These  were  essentials  of  the  case  for  the 
prosecution:  Rex  v.  Beaver  (1905),  9 O.L.R.  418.  On  the  ques- 
tion of  obscenity,  he  referred  to  Burbidge’s  Digest  of  the  Criminal 
Law  of  Canada,  pp.  163  and  164,  especially  the  note  at  the  foot 
of  the  latter  page. 

J.  R.  Cartwright,  K.C.,  and  E.  Bayly,  K.C.,  for  the  Crown, 
contended  that  the  defendant  had  been  rightly  convicted.  There 
was  sufficient  evidence  to  establish  that  the  defendant  had  know- 
ledge that  the  books  were  on  sale  and  were  sold  and  that  they 
were  obscene.  On  the  question  of  obscenity  they  referred  to 
The  Queen  v.  Hicklin  (1868),  L.R.  3 Q.B.  360;  People  v.  Doris 
(1897),  14  App.  Div.  N.Y.  117;  People  v.  Muller  (1884),  96 
N.Y.  408;  State  v.  McKee  (1900),  73  Conn.  18;  United 

States  v.  Bennett  (1879),  16  Blatchf.  (Circuit  Court)  338; 
Rex  v.  Key  (1908),  1 Cr.  App.  R.  135. 

Wilkie,  in  reply. 

April  4,  1912.  Meredith,  J.A. : — The  convicted  man  is  a 
reputable  book-seller,  who  carries  on  business,  in  an  extensive 
way,  in  one  of  the  business  centres  of  Toronto.  Although  neither 
his  reputation,  nor  the  character  and  extent  of  his  business,  is 


C.  A. 
1912 

Rex 

v. 

Britnell 


10 — XXVI.  O.L.R. 


138 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Rex 

v. 

Britnell 

Meredith,  J.A. 


a reason  why  he  should  not  be  convicted,  and  punished,  if  guilty, 
yet  they  are  not  things  without  weight,  and  very  considerable 
weight,  in  considering  the  probabilities  of  the  truth  of  the  charge 
against  him  upon  the  question  whether  there  was  any  reason- 
able evidence  of  guilt  adduced  against  him  at  the  trial,  as  well 
as  upon  the  question  of  fact,  with  which  the  Court  cannot  deal, 
whether  guilty  or  not  guilty. 

The  charge  against  him  seems  to  have  been  a double  one  in 
two  senses,  exposing  for  sale  and  selling  two  different  obscene 
books;  but  no  question  is  raised  in  that  respect;  the  conviction 
seems  to  have  been  in  accordance  with  the  charge,  as  if  of  one 
offence  only. 


The  offence  is  one  against  morality,  and  one  of  a despicable 
character;  the  maximum  punishment  of  which  is  two  years’ 
imprisonment;  and  it  must  be  “ knowingly”  committed,  “ with- 
out lawful  justification  or  excuse.” 

Assuming  the  books  to  have  been  sc  Id,  or  exposed  for  sale, 
and  to  have  been  obscene  books,  which  is  assuming  a good  deal 
in  favour  of  the  prosecution,  two  other  essential  things  must  have 
been  proved  against  the  accused  before  he  rightly  could  have 
been  convicted:  (1)  that  the  books  were  sold  or  exposed  for 
sale  with  his  knowledge;  and  (2)  that  he  knew  of  their  obscene 
character.  This  is  but  a reasonable  provision  of  the  law;  if  it 
were  otherwise,  the  lot  of  a book-seller,  however  honest  and 
anxious  to  avoid  anything  like  offending  morality,  would  be  a 
hard  one;  and  especially  hard  upon  one  who  carries  a stock  of 
a quarter  of  a million  volumes,  as  one  of  the  witnesses  thought 
the  accused  does. 


Neither  book  was  manifestly  or  notoriously  obscene  or  im- 
moral; and  it  may  be  that  neither  is  in  that  respect  better  or 
worse  than  a great  number  of  books  which  are  freely  sold  and 
read  everywhere;  and  there  is,  I should  think,  nothing  in  either 
of  them  to  make  them  very  attractive  to  any  one;  and  the  small 
profit  to  be  derived  from  their  sale  is  hardly  such  as  would  in- 
duce a large  dealer  to  conceal  them  in  his  cellar,  so  that  he  might 
sell  them  with  less  chance  of  being  found  out,  and  to  sell  them 
with  the  possibility  of  two  years’  imprisonment  in  the  peni- 
tentiary before  his  eyes. 

There  was  no  sort  of  evidence  of  any  exposure  of  them  for 


XXVI.] 


ONTARIO  LAW  REPORTS. 


139 


sale;  and  there,  manifestly,  should  have  been  a finding  of  “not 
guilty”  to  that  extent;  but  there  was  not;  on  the  contrary,  there 
seems  to  have  been  a conviction  in  respect  of  which  the  penalty 
imposed  was  to  some  extent  imposed. 

Nor  can  I think  that  there  was  any  reasonable  evidence  oL 
a guilty  knowledge  on  the  part  of  the  convicted  man  of  the  sale 
which  was  made,  and  which  was  of  one  of  the  books  only,  or  of 
its  obscene  character,  if  it  really  has  any. 

It  is  quite  plain  that,  in  the  extensive  business  of  the  convicted 
man,  the  books  in  question  might  have  been  bought  and  sold 
without  his  knowledge;  he  did  not  attend  to  the  department  in 
which  such  books,  that  is,  “works  of  fiction,”  are  sold.  He 
testified  that  he  did  not  know  that  there  were  any  such  books 
in  his  establishment;  that  he  had  a year  or  more  before  found 
invoices  of  them  and  returned  them,  because,  from  what  he  had 
heard,  he  thought  their  tendency  was  suggestive,  and  so  did 
not  want  to  sell  them.  There  is  not  a word  of  testimony  to  the 
contrary  of  this;  the  most  that  can  be  said  is,  that,  if  dealing 
with  a man  who  might  be  thought  untruthful  and  tricky,  there 
were  some  circumstances  of  suspicion,  a book  having  been  sold 
and  other  books  having  been  found  in  the  cellar;  things  which 
are  not  unsatisfactorily  explained  by  the  witnesses  for  the  prose- 
cution. But  no  one,  much  less  a reputable  man  doing  an  exten- 
sive reputable  business,  is  to  be  convicted  on  suspicion  merely; 
when  there  is  no  more  than  that  against  him  a verdict  of  “not 
guilty”  should  be  entered.  The  statement  that,  from  what  he 
had  heard,  he  thought  their  tendency  suggestive,  is  a good  way 
removed  from  an  admission  that  he  knew  that  they  were  obscene. 

The  cases  which  were  referred  to  on  the  argument  here  were 
very  different  from  this  case;  in  them  the  obscene  character  of 
the  writings  was  manifest,  and  in  some  of  them  it  was  the  author 
who  was  prosecuted  and  who  had  sold  them. 

In  a case  of  this  character,  where  there  may  be  different 
opinions  as  to  the  immorality  of  a book,  which  is  being  generally 
sold  here  and  in  other  countries  or  another  country,  it  would 
seem  to  me  to  be  the  better  course  for  those  who  object  to  its 
sale  on  that  ground,  to  give  notice  of  such  objection  to  such  a 
book-seller  as  the  convicted  man  is,  and  to  prosecute  only  if  the 
objection  is  not  heeded.  No  such  book-seller  can  have  any 


C.  A. 
1912 

Rex 

v. 

Britnell 

Meredith,  J.A. 


140 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Rex 

v. 

Britnell 

Meredith,  J.A. 


reasonable  desire  to  sell  such  books  as  those  in  question,  if  they 
be  obscene,  for  all  there  is  in  it  for  him,  at  the  risk  of  being  branded 
as  a criminal  and  sent  to  penitentiary  for  two  years,  after  first 
perjuring  himself  in  the  hope  of  escaping  conviction. 

I would  answer  the  second  question  in  the  negative  and  direct 
that  the  accused  be  discharged. 


Magee,  J.A. : — The  two  questions  stated  by  the  Police  Magis- 
trate under  the  order  of  the  Court  for  its  opinion  refer  only  to 
sec.  207  of  the  Criminal  Code,  1906,  under  which  he  had  professed 
to  convict.  That  section,  as  amended  in  1909,  declares  that 
every  one  is  guilty  of  an  indictable  offence  “who  knowingly, 
without  lawful  justification  or  excuse, — (a)  makes,  manufactures, 
or  sells,  or  exposes  for  sale  or  to  public  view  . . . any  obscene 

book  or  other  printed,  typewritten  or  otherwise  written  matter, 
or  any  picture,  photograph,  model  or  other  object  tending  to 
corrupt  morals.”  In  the  information  laid  against  this  defen- 
dant it  was  charged  only  that  in  the  month  of  April,  1911,  he, 
“contrary  to  law,  exposed  for  sale  and  sold  certain  indecent  and 
obscene  books,  tending  to  corrupt  public  morals,  contrary  to  the 
form  of  the  statute  in  such  case  made  and  provided.”  It  was 
not  charged  that  he  did  it  either  knowingly  or  without  justifica- 
tion or  excuse.  It  was  necessary  to  allege  that  he  did  it  knowingly 
to  bring  it  under  that  section.  The  information  was  not  amended. 
He,  therefore,  was  not  charged  with  any  criminal  offence  under 
that  section.  The  words  “contrary  to  law”  and  “contrary  to 
the  form  of  the  statute”  do  not  make  up  for  the  absence  of  that 
allegation  of  knowledge. 

In  the  formal  conviction,  however,  the  words  “knowingly”  and 
“without  lawful  justification  or  excuse”  are  inserted  in  setting  out 
the  offence,  which  is  otherwise  described  as  in  the  information, 
except  that  the  word  “morals”  is  substituted  for  “public  morals;” 
and  the  word  “obscene”  for  “indecent  and  obscene.” 

In  his  statement  of  the  case  for  this  Court,  the  learned  Police 
Magistrate  says:  “The  defendant  elected  to  be  tried  summarily 
and  pleaded  not  guilty.  After  hearing  evidence,  I was  of  the 
opinion  that  the  charge  was  proved,  and  accordingly  convicted 
the  defendant,  being  satisfied  that  the  books  were  obscene,  and 
that  the  defendant  knew  that  they  were  on  sale  in  his  establish- 


XXVI.  ] 


ONTARIO  LAW  REPORTS. 


141 


ment.”  It  is  not  specifically  stated  whether  or  not  the  Police 
Magistrate  was  satisfied  that  the  defendant  knew  of  the  books 
being  obscene,  and  we  are  as  to  that  left  to  the  inference  to  be 
drawn  from  the  fact  that  he  made  the  conviction.  In  his  reasons 
for  his  decision,  given  at  the  time,  he  said,  “The  section  of  the 
Code  under  which  this  prosecution  is  brought  is  207.” 

It  would,  therefore,  appear  that  the  defendant  was  convicted 
of  an  offence  with  which  he  was  not  charged  and  for  which  he 
had  not  consented  to  be  tried  summarily. 

As  the  charge  was  laid  “contra  formam  statuti,”  and  was 
dealt  with  under  sec.  207,  and  the  questions  propounded  refer 
only  to  that  section,  it  is  unnecessary  to  consider  how  far,  at 
common  law,  a book-seller  charged  with  selling  and  publishing 
an  obscene  libel,  sold  by  his  clerk  in  the  course  of  his  business, 
could  shelter  himself  by  his  want  of  knowledge  of  the  sale,  or  of 
the  contents,  or  how  far  either  must  be  brought  home  to  him. 

Dealing,  then,  with  the  case  as  one  under  sec.  207,  there 
must  be  shewn  knowledge  of  the  sale  or  exposure  for  sale,  and 
also  knowledge  of  the  character  of  the  book.  That  the  latter 
must  be  shewn  was  held  by  this  Court  in  Rex  v.  Beaver , 9 O.L.R. 
418.  The  former  is  also  manifestly  necessary.  An  auctioneer 
selling  a library,  or  shelf  or  package  of  books,  might  not  know 
what  books  it  contained.  Objectionable  articles  may  be  made 
or  sold  in  a factory  or  shop;  and,  while  the  statute  would  be 
futile  if  the  proprietor  could  escape  because  they  were  not  made 
or  sold  directly  by  himself,  but  by  his  employees,  though  with 
his  knowledge,  it  might  also  cause  injustice  if  he  could  be  punished 
because  the  making  or  selling  was  done  for  his  benefit  by  his 
employees,  though  without  his  knowledge  or  consent,  or  even 
against  his  orders. 

The  only  books  specifically  referred  to  in  the  evidence  are 
three  recent  novels,  which,  for  brevity,  I may  refer  to  as  X,  Y, 
and  Z.  There  were,  indeed,  other  books  found  along  with  these 
three  in  the  cellar  of  the  defendant’s  shop,  but  the  Police  Magis- 
trate does  not  name  them,  and  merely  says  that  some  of  them 
were  of  the  same  type,  and  some  of  them  he  had  looked  through 
sufficiently  to  see  that  they  all  were  more  or  less  within  the  scope 
of  the  test  of  obscenity. 


C.  A. 
1912 

Rex 

v. 

Britnell 

Magee,  J.A. 


142 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Rex 

v. 

Britnell 


Magee,  J.A. 


[VOL. 


Apart  from  evidence  as  to  the  character  of  the  three  books, 
X,  Y,  and  Z,  the  prosecution  contented  itself  with  proving  that 
a copy  of  Y had  been  bought  on  the  6th  April  at  the  defendant’s 
shop  from  a clerk  who  brought  it  from  the  cellar;  and  that  on 
the  8th  April  a Police  Inspector  went  to  the  shop  and  there  saw 
the  defendant,  who  said  that  he  had  not  a copy  of  X or  Y;  but 
the  Inspector  says,  “On  searching,  we  found,”  in  a box  in  the 
cellar,  eleven  copies  of  X and  thirteen  of  Y,  besides  other  books, 
including  one  or  more  copies  of  Z,  and  that,  in  the  defendant’s 
presence,  his  clerk  said  that  he  had  been  selling  the  book  Y, 
and  he  thought  that  the  defendant  knew  it.  It  is  not  stated 
whether  the  defendant  made  any  remark  thereupon.  Indeed,  it 
is  not  said  that  he  heard  it.  He  was  not  asked  about  it  when 
called  in  his  own  defence,  and  he  did  not  refer  to  it. 

It  is  not  shewn  that  any  of  the  public  or  customers  were  ever 
admitted  to  the  cellar.  There  was,  therefore,  no  evidence  of  ex- 
posure of  any  of  the  books  for  sale,  and  only  proof  of  a sale  of  one 
copy  of  one  book,  Y,  by  the  clerk,  and  no  proof  of  the  defendant’s 
knowledge  of  the  contents  of  any  of  the  books.  Z and  the  other 
unnamed  books  are  not  further  spoken  of,  and  may  be  left  out 
of  consideration. 

For  the  defence,  the  defendant  himself  and  four  of  his 
clerks  gave  evidence.  It  appears  that  his  stock  contains 
150,000  to  250,000  books,  of  which  4,000  to  7,000  are  kept 
in  the  cellar  in  stock.  A clerk  says  the  whole  place  is  full  of 
books,  and  another,  that  he  “put  the  boxes  of  books  down  the 
cellar,  and  especially  as  at  Christmas  time  there  was  not  room 
for  as  much  stock.”  The  defendant  says  that  in  the  cellar  he 
has  in  stock  a theological  library  and  cook-books  and  other  books 
that  he  has  not  room  for  in  the  shop.  One  department  of  the 
business  is  that  of  dealing  in  old  or  antiquarian  books.  One  of 
his  clerks,  Appleton,  who  states  that  he  looks  after  the  sale  of 
the  new  books,  says  that  X came  out  in  1907,  “and  was  sold  by 
other  dealers  here  before  we  had  it.”  “We  sold  a great  many 
copies  till  lately,  and  now  we  would  not  sell  more  than  one  a 
month  or  so.”  The  defendant,  himself,  testified  that  he  did  sell 
them  when  they  first  came  out,  but  “a  year  or  more  ago”  he 
found  in  the  invoices  a shipment  of  X and  Y,  and  he  returned 
the  books,  as  from  what  he  heard  he  thought  the  tendency  of 


XXVI.] 


ONTARIO  LAW  REPORTS. 


143 


the  books  was  suggestive,  and  so  did  not  want  to  sell  them; 
and  he  did  not  know,  when  the  Police  Inspector  asked  him  about 
them,  that  he  had  a copy  of  either,  and  he  had  not  read  X nor  Y, 
“nor  such  books.”  A clerk  also  testifies  that,  “a  year  ago  or  so,” 
the  defendant  returned  a shipment  containing  X and  Y,  “be- 
cause they  were  not,  I think,  the  class  of  books  he  desired  to  sell.” 
Even  if  we  take  these  statements  as  going  far  enough  to  shew 
that  the  defendant  knew  that  the  books  were  obscene  or  such  as 
tended  to  corrupt  morals,  it  is  evident  that  there  is  here  no  proof 
of  a sale  with  his  concurrence  after  he  had  learned  of  the  objec- 
tionable character  of  the  books. 

Then  it  appears  from  the  evidence  of  Appleton,  who 
has  charge  of  the  sale  of  the  new  books,  that  “a  year  ago 
we  got  some  twenty-five  copies  of  each  of  these  two  books,” 
X and  Y,  and  “ those  found  by  the  police  were  the  re- 
mainder of  that  order.”  The  invoice  containing  Y seems  to 
have  been  produced  by  the  witness  before  the  Police  Magis- 
trate, but  is  not  among  the  papers  sent  to  this  Court,  and 
the  exact  date  of  it  does  not  further  appear.  Appleton  says: 
“The  defendant  probably  did  not  know  that  I had  ordered  these 
books,  as  I am  in  charge  of  that  branch.”  Another  clerk  says 
that  the  defendant  is  at  the  office  in  rear,  and  does  not  know  what 
new  books  are  in  stock.  Another  says:  “The  whole  place  is  full 
of  books,  250,000  I would  think.  Appleton  and  I are  in  charge 
of  the  front  of  the  shop.  The  defendant  is  at  the  office  in  rear, 
and  looks  after  the  old  books.  . . . The  defendant  does  not 

know  just  what  books  we  have  bought,  nor  all  we  have  in  stock.” 
Another  clerk,  Congdon,  who  says  he  is  in  charge  of  the  anti- 
quarian books,  says  that  the  defendant  also  looks  after  that  de- 
partment, and  the  defendant  does  not  know  what  new  books 
are  in  stock.  The  defendant,  himself,  says:  “I  am  at  the  back 
of  the  shop,  where  the  branches  of  the  business  I look  after  are 
situated:  I do  not  attend  to  the  new  novels  at  all.”  He  says 
that  the  clerk  who  ordered  the  last  copies  of  these  two  books  was 
in  his  employ  when  he  returned  the  shipment,  but  he  only  remem- 
bered telling  Congdon  of  having  sent  the  shipment  back,  and 
he,  Congdon,  would  have  nothing  to  do  with  ordering  these  books 
— “they  would  likely  be  ordered  by  Appleton.” 

Bearing  in  mind  the  extent  of  the  defendant’s  business,  and 


C.  A. 
1912 

Rex 

v. 

Britnell 

Magee,  J.A. 


144 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Rex 

v. 

Britnell 

Magee,  J.A. 


[VOL. 


the  fact  that  the  prosecution  proved  only  one  sale — and  that 
by  a clerk — of  one  book,  without  shewing  that  the  defendant 
had  any  knowledge  of  its  contents,  can  it  be  said  that  this  evi- 
dence given  for  the  defence  affirmatively  establishes  knowledge 
by  the  defendant  that  this  small  order  for  these  books  had  been 
given  by  his  clerk,  after  he  himself  had  sent  back  a shipment  of 
these  very  books  on  account  of  their  character?  It  may  be  said 
that,  even  taking  the  evidence  for  the  defence,  it  is  not  absolutely 
clear  that  the  defendant  did  not  know  of  his  clerk’s  order,  whether 
at  the  time  or  afterwards,  or  of  the  receipt  of  the  books  there- 
under, even  though  he  thought  that  all  had  been  sold;  but  it 
was  for  the  prosecution  to  establish  knowledge,  not  for  him  to 
shew  want  of  knowledge;  and,  if  the  prosecution  had  had  doubts 
upon  the  subject,  it  could  have  been  cleared  up  by  cross-examina- 
tion. That  not  having  been  done,  there  was,  in  my  opinion, 
failure  of  proof  of  knowledge  of  the  sale,  even  in  the  sense  of 
implied  or  tacit  authority  or  consent  to  it;  and,  therefore,  the 
second  question  should  be  answered  in  the  negative. 

It  is  unnecessary  to  answer  the  first  question,  as  it  becomes 
merely  academic  when  the  second  is  answered  in  the  negative. 
No  specific  parts  of  any  of  the  books  have  been  referred  to  in 
the  information,  the  conviction,  the  evidence,  or  in  the  argu- 
ment. The  statement  by  the  Police  Inspector  as  to  the  contents 
of  X and  Y was  conceded  to  be  at  best  inaccurate.  No  particu- 
lars seem  to  have  been  asked  for  by  the  defence,  or  delivered. 
The  result  would  be  that  it  would  be  necessary  for  the  Court  to 
peruse  the  books  seized  to  see  if  it  could  discover  any  objection- 
able page,  phrase,  or  sentiment,  before  it  could  answer  the  ques- 
tion propounded.  In  a sense  this  would  be  to  ask  the  Court 
to  be  accuser  instead  of  Judge.  It  is  a course  which  should  not 
again  be  adopted. 

The  defendant,  on  the  evidence,  should,  in  my  opinion,  have 
been  acquitted,  and  the  conviction  should  be  declared  invalid. 

Moss,  C.J.O.,  Garrow  and  Maclaren,  JJ.A.,  concurred. 

Conviction  quashed. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


145 


[DIVISIONAL  COURT.] 

Beatty  v.  Bailey. 

Mortgage — Covenant  for  Payment  Implied  in  Registered  Charge  under 
Land  Titles  Act — Action  for  Mortgage-money — Instrument  not  under 
Seal — Effect  of  Provisions  of  Act — Limitation  of  Actions — “Specialty” 
— Period  of  Limitation — Second '■  Mortgagee — Cessation  of  Charge  for 
Benefit  of  First  Mortgagee — Sale  under  Poioer- — Effect  of,  upon  Right 
to  Sue — Inability  to  Reconvey — Default  of  Mortgagor — Reservation 
of  Rights. 

The  defendant,  in  1891,  created  a charge  upon  land  which  had  been  brought 
under  the  Land  Titles  Act,  by  an  instrument,  not  under  seal,  in  the 
form  given  in  the  schedule  to  the  Land  Titles  Act  then  in  force  (No.  28 
in  the  schedule  to  R.S.O.  1897,  ch.  138).  This  was  a second  charge  or 
mortgage  upon  the  land,  and  payment  of  ithe  moneys  secured  was  to  be 
made  in  1894.  The  instrument  was  registered  under  the  Act.  It  did  not 
in  terms  contain  a covenant  for  payment  of  the  mortgage-money:  — 

Held,  that,  under  sec.  34  of  the  Act  (R.S.O.  1897,  ch.  138),  such  a coven- 
ant was  implied  as  against  the  person  who  created  the  charge,  com- 
pleted by  registration;  and  an  action  upon  that  covenant  was  not  barred 
by  the  lapse  of  less  than  twenty  years  from  the  date  of  default,  which 
was  not  earlier  than  1894,  being  (by  the  effect  of  the  Land  Titles  Act, 
though  the  instrument  was  not  under  seal)  an  action  upon  a “specialty,” 
within  the  meaning  of  the  Statute  of  Limitations,  R.S.O.  1897,  ch.  72, 
sec.  1 (6) — a covenant  contained  in  an  indenture  of  mortgage  made 
before  the  1st  July,  1894. 

Sections  13,  34,  40(3),  41,  101,  and  107  of  the  Land  Titles  Act,  R.S.O. 
1897,  ch.  138,  and  sec.  102  of  the  Land  Titles  Act,  1 Geo.  V.  ch.  28, 
considered. 

The  second  chargee,  the  plaintiff,  in  order  to  free  the  land  for  the  benefit  of 
the  first  chargee,  in  1903  executed  a cessation  of  his  second  charge,  and 
that  cessation  was  registered.  By  it  he  expressly  reserved  his  rights 
against  his  mortgagor,  the  defendant,  both  for  payment  of  the  moneys 
secured  by  the  charge  and  upon  the  covenants  contained  in  the  charge:  — 

Held,  that  the  effect  of  the  registration  of  the  cessation  was,  upon  sale  by 
the  first  mortgagee,  to  give  the  purchaser  an  absolute  ownership  as  to 
the  land;  but  it  left  unimpaired  the  right  of  the  plaintiff  to  proceed  for 
the  recovery  of  the  amount  due  by  the  mortgagor,  the  defendant. 

Although  the  mortgagee  suing  on  a covenant  in  the  mortgage  must  ordin- 
arily be  in  a position  to  reconvey  the  land  upon  payment  of  what  is  due, 
that  does  not  necessarily  apply  to  the  case  of  a second  mortgagee  whose 
rights  against  the  land  have  been  extinguished  by  the  act  of  the  first 
mortgagee.  The  inability  of  the  mortgagee  to  convey  will  not  bar  the 
right  of  action  on  the  covenant,  if  such  inability  arises  from  any  default 
of  the  mortgagor.  The  mortgagor’s  duty  was  to  pay  off  the  first  mort: 
gage,  and  so  prevent  the  exercise  of  the  power  of  sale  by  which  the 
equity  of  redemption  was  extinguished;  and  the  loss  of  the  land  was 
occasioned,  not  by  the  action  of  the  plaintiff  in  releasing  his  charge,  but 
by  the  rights  conferred  upon  the  first  mortgagee  by  his  security,  and 
by  the  default  of  the  defendant  himself. 

In  re  Burrell,  Burrell  v.  Smith  (1869),  L.R.  7 Eq.  399,  applied  and 
followed. 

Palmer  v.  Hendrie  (1860),  28  Bea/v.  341,  distinguished. 

Judgment  of  Denton,  Jun.  Co.C.J.,  reversed. 

An  appeal  by  the  plaintiff  from  the  judgment  of  Denton, 
Jun.  Co.  C.J.,  dismissing  an  action  brought  in  the  County  Court 
of  York  for  the  recovery  of  $797.20,  for  principal  and  interest, 


D.  C. 
1912 

April  6. 


146 


ONTARIO  LAW  REPORTS. 


D.  C. 
1912 

Beatty 

V. 

Bailey. 


[VOL. 


upon  the  covenant  implied  in  an  instrument  executed  and  regis- 
tered for  the  purpose  of  creating  a mortgage  or  charge  upon  land 
made  subject  to  the  Land  Titles  Act,  R.S.O.  1897,  ch.  138,  now 
1 Geo.  V.  ch.  28. 


The  following  reasons  for  judgment  were  given  by  Denton, 
Jun.  Co.  C.J. : — The  facts  of  this  case  are  not  in  dispute.  On  the 
26th  August,  1891,  the  defendant  executed  a charge  under  the 
Land  Titles  Act  in  favour  of  the  plaintiff  and  one  Boulton,  for 
the  sum  of  $350  and  interest,  on  property  in  Melbourne  avenue, 
Toronto.  This  was  a second  mortgage;  the  first  mortgage,  for 
$1,350,  being  at  that  time  held  by  one  Ferguson.  On  the  9th 
October,  1891,  Boulton  transferred  his  interest  in  the  said  charge 
to  the  plaintiff,  who  thereby  became  the  sole  owner  of  the  charge. 
The  defendant,  on  the  27th  August,  1891,  conveyed  his  equity  of 
redemption  to  on^e  Sarah  Morrison,  who  continued  for  a short  time 
to  pay  the  interest  on  the  mortgages.  On  the  1st  November, 
1892,  Ferguson  transferred  his  first  mortgage  to  Janet  Harvey. 
No  interest  or  principal  was  paid  on  either  of  these  mortgages 
subsequent  to  1894.  In  1903,  Janet  Harvey,  the  first  mortgagee, 
sold  the  property,  for  a sum  which  was  as  much  as  could  be  got  for 
the  property  at  that  time,  but  which  was  considerably  less  than 
her  mortgage  debt.  In  order  to  give  a title,  she  had  either  to 
foreclose  or  obtain  a release  of  the  equity  of  redemption  from 
Morrison  and  a discharge  from  the  plaintiff,  the  second  mort- 
gagee. She  chose  the  latter  course;  and,  on  the  30th  March, 
1903,  Sarah  Morrison  transferred  her  equity  of  redemption  to 
the  first  mortgagee.  The  plaintiff  then  executed  a cessation  or 
discharge  of  his  mortgage,  dated  the  11th  May,  1903. 

This  cessation  contains  the  following  clause:  “Now,  there- 
fore, I hereby  authorise  the  Master  of  Titles  to  notify  on  the 
register  the  cessation  of  the  said  charge  as  to  the  lands  described 
therein,  it  being  expressly  understood  that  I,  nevertheless,  reserve 
all  my  rights,  claims,  and  demands  against  the  said  George  Bailey 
and  Alexander  Claude  Foster  Boulton  and  eithfer  of  them,  his 
heirs,  executors,  administrators,  and  assigns,  both  for  payment  of 
the  moneys  secured  by  the  said  charge  and  upon  the  covenants 
contained  in  said  charge  and  in  the  transfer  thereof,  and  that  this 
authority  shall  not  release,  prejudice,  waive,  or  affect  any  other 


XXVI.] 


ONTARIO  LAW  REPORTS. 


147 


security  or  securities  which  I now  have  or  which  I may  at  any 
time  hereafter  obtain  for  the  payment  of  the  moneys  secured  by 
the  said  charge,  it  being  my  intention  to  retain  all  my  rights, 
save  the  right  to  look  to  the  said  lands  for  the  payment  of  the 
moneys  secured  by  the  said  charge.” 

This  action  is  brought  on  the  covenant  in  the  second  mortgage 
to  recover  the  principal  and  the  interest  that  has  accrued  since 
1894. 

A discussion  took  place  at  the  trial  as  to  whether  or  not  the 
action  was  barred  by  the  Statute  of  Limitations.  But,  in  the 
view  I take  of  the  case,  it  is  unnecessary  to  consider  that  point. 

It  seems  to  me  that  the  plaintiff  cannot  recover,  and  that 
for  the  reason  that  every  mortgagor  has  a right  to  have  a 
reconveyance  of  the  mortgaged  property,  upon  payment  of  the 
money  due  upon  the  mortgage;  and  tha.t  every  mortgagee  is 
charged  with  the  duty  of  making  such  reconveyance  upon  such 
payment  being  made.  Walker  v.  Jones  (1866),  L.R.  1 P.C.  50, 
is,  I think,  conclusive  against  the  plaintiff’s  contention.  In  that 
case,  as  here,  the  mortgagee  discharged  the  lands  and  premises 
from  the  security  which  he  held,  but  purported  to  reserve  to  him- 
self any  other  remedy  or  security  which  he  had  on  promissory 
notes  which  the  mortgage  in  question  was  given  to  secure.  That 
is  upon  all  fours  with  this  case.  Other  cases  upon  the  same  line 
are:  Allison  v.  McDonald  (1893),  20  A.R.  695;  Rourke  v.  Robin- 
son, [1911]  1 Ch.  480;  Palmer  v.  Hendrie  (1859),  27  Beav.  349; 
Perry  v.  Barker  (1806),  13  Ves.  198;  Gowland  v.  Garbutt  (1867), 
13  Gr.  578;  Munsen  v.  Hauss  (1875),  22  Gr.  279;  In  re  Thuresson 
(1902),  3 O.L.R.  271;  Mendels  v.  Gibson  (1905),  9 O.L.R.  94. 
These  cases,  it  is  true,  are  first  mortgage  cases,  and  it  may  he 
contended  (though  it  was  not  dwelt  upon  in  argument)  that 
this  rule  does  not  apply  to  the  case  of  a second  mortgage.  But, 
while  there  is,  of  course,  a vast  difference  between  a first  and 
second  mortgagee  as  regards  the  legal  estate  and  the  tenure  and 
value  of  his  security,  is  there  any  valid  reason  for  refusing 
to  apply  this  principle  of  law  to  each?  A second  mortgagee 
has  vested  in  him  an  equity  of  redemption  which  he  holds,  as 
it  were,  in  pledge.  Upon  repayment,  the  second  mortgagee,  by 
his  discharge,  revests  in,  or  reconveys  to,  the  person  then  en- 
titled to  it,  his  interest  in  the  mortgaged  premises,  which  is  the 


D.  0. 
1912 

Beatty 

v. 

Bailey. 


148 


ONTARIO  LAW  REPORTS. 


D.  C. 
1912 

Beatty 

v. 

Bailey. 


VOL. 


equity  of  redemption.  If  the  interest  of  the  second  mortgagee 
has  been  extinguished  by  the  -foreclosure  of  the  first  mortgage, 
then  manifestly  he  has,  through  no  fault  of  his  own,  nothing  to 
reconvey;  but.  where  he  voluntarily  discharges  his  interest  in 
the  lands  from  his  second  mortgage,  even  although  this  is  done 
to  assist  the  first  mortgagee  to  obtain  a clear  title,  it  is  not  plain 
to  me  that  the  same  rule  of  law  ought  not  to  apply. 

In  this  case  the  plaintiff,  by  discharging  the  lands  from 
the  security  which  he  held,  voluntarily  and  effectually  put  it 
out  of  his  power  to  reconvey  his  interest  in  the  mortgaged 
premises.  By  that  act,  on  the  authorities  cited,  he  has  pre- 
cluded himself  from  recovering  against  the  mortgagor  on  the 
covenant. 

The  action  will  be  dismissed  with  costs. 


April  1.  The  appeal  was  heard  by  a Divisional  Court  com- 
posed of  Boyd,  C.,  Latchford  and  Middleton,  JJ. 

W.  J.  Elliott , for  the  plaintiff.  No  defence  arises  by  reason 
of  the  Statute  of  Limitations.  When  the  defendant  released  the 
land,  he  expressly  reserved  his  rights  under  the  covenant  in  re- 
spect of  the  moneys  to  be  paid:  In  re  Richardson  (1871),  L.R. 
12  Eq.  398.  The  mortgagor  was  still  bound  under  the  covenant 
to  pay  imposed  by  statute;  and  the  action  is,  therefore,  one 
founded  on  a specialty,  and  is  not  barred  until  after  twenty  years 
from  default:  Essery  v.  Grand  Trunk  R.W.  Co.  (1891),  21  O.R. 
224.  See  also  R.S.O.  1897,  ch.  138,  sec.  107;  and  see  the  same 
section,  as  amended,  1 Geo.  V.  ch.  28,  sec.  102,  as  to  a seal  being 
unnecessary.  The  learned  County  Court  Judge  has  held  that 
the  plaintiff  cannot  recover,  because  every  mortgagor  has  a right 
to  have  a reconveyance  of  the  mortgaged  property  on  payment 
of  the  money  due  upon  the  mortgage.  But  the  inability  of  the 
mortgagee  to  reconvey  will  not  bar  the  right  of  action  on  the 
covenant  if  such  inability  arises  from  any  default  of  the  mort- 
gagor: Coote’s  Law  of  Mortgages,  7th  ed.,  vol.  2,  p.  982.  If 
the  mortgagor  had  paid  off  the  first  mortgage,  the  property  would 
not  have  been  sold  under  the  power:  In  re  Burrell , Burrell  v. 
Smith  (1869),  L.R.  7 Eq.  399;  Driffill  v.  McFall  (1877),  41  U.C.R. 
313. 

W.  C.  Chisholm,  K.C.,  for  the  defendant.  The  claim  is  barred 
by  the  Statute  of  Limitations,  R.S.O.  1897,  ch.  72,  the  debt  no 


XXVI.] 


ONTARIO  LAW  REPORTS. 


149 


being  a specialty  debt.  The  judgment  of  the  learned  County 
Court  Judge  is  right  and  should  be  affirmed.  The  mortgagee 
must  always  be  in  a position  to  reconvey  the  land  upon  pay- 
ment being  made  by  the  mortgagor.  Here  the  plaintiff,  by 
discharging  the  lands  from  the  security  which  he  held,  negatived 
the  possibility  of  reconveying.  (Reference  to  the  cases  cited  by 
the  learned  Junior  Judge,  supra.) 

Elliott,  in  reply. 

April  6.  Boyd,  C.: — The  Land  Titles  Act  was  expressly  de- 
signed to  simplify  titles  and  to  facilitate  the  transfer  of  land;  it 
is  not  intended  to  change  or  destroy  civil  rights  and  remedies. 
True  it  is  that  “ seals”  were  in  effect  abolished  as  a necessary 
part  of  any  instrument  affecting  land,  and  the  forms  given  in 
the  Act  or  approved  by  the  Act  for  the  transfer  and  the  mort- 
gaging or  charging  of  land  are  to  be  without  seals.  This  is  in- 
tended to  emphasise  the  fact  that  the  virtue  of  the  Act  does  not 
rest  on  the  technical  form  and  execution  of  the  conveyance,  but 
upon  the  fact  of  the  instrument  (whatever  it  is)  being  registered 
under  the  Act.  It  is  the  certificate  of  this  registration  held  by 
the  owner  which  corresponds  to  the  ordinary  possession  of  title 
deeds:  R.S.O.  1897,  ch.  138,  sec.  101. 

Section  13  provides  that  the  first  registration  of  any  person 
as  owner  of  land  with  an  absolute  title  shall  vest  in  that  person 
an  estate  in  fee  simple.  Section  33  provides  for  the  mortgaging 
of  registered  land  thus:  every  owner  may  charge  the  land  with 
the  payment  at  an  appointed  time  of  any  principal  sum,  which 
charge  shall  be  completed  by  entering  on  the  register  the  person 
in  whose  favour  the  charge  is  made  as  the  owner  of  the  charge. 
Section  34  provides  that,  where  such  a registered  charge  is  created 
on  land,  there  shall  be  implied  on  the  part  of  the  owner  of  the 
land,  his  heirs,  executors,  etc.,  a covenant  with  the  owner  of  the 
charge  to  pay  the  principal  sum  charged.  And,  by  sub-sec.  2, 
where  any  charge,  whether  under  seal  or  not,  is  expressed  to  be 
made  in  pursuance  of  the  Act  respecting  short  forms  of  mort- 
gages, or  refers  thereto,  then  the  form  of  words  therein  (according 
to  the  clauses  numbered)  shall  have  the  same  meaning  and  effect 
as  are  provided  for  in  the  Act  as  to  short  forms. 

By  sec.  40  (3),  on  the  certificate  of  the  owner  of  a charge  autho- 


rs C. 

1912 

Beatty 

v. 

Bailey. 


150 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

Beatty 

Bailey. 

Boyd,  C. 


rising  the  discharge  of  any  part  of  the  land  therefrom  or  any 
part  of  the  money  secured  thereby,  the  Master  may  note  on  the 
register  the  discharge  of  such  land  from  the  charge  or  the  dis- 
charge of  such  part  of  the  money. 

By  sec.  41,  every  transfer  of  land  under  the  Act  is  completed 
by  entering  on  the  register  the  transferee  as  owner;  and  till 
such  entry  the  transferor  shall  be  deemed  to  remain  owner  of 
the  land. 

Section  101  provides  for  the  creation  of  a lien  on  the  land, 
that  is,  in  equity  such  as  would  arise  out  of  a deposit  of  the  title 
deeds. 

Section  107  is  thus  expressed:  “Notwithstanding  the  pro- 
visions of  any  statute,  or  any  rule  of  law,  any  charge  or  transfer 
of  land  registered  under  this  Act  may  be  duly  made  under  a charge 
or  transfer  without  seal.”  By  amendment  made  after  and  not 
affecting  this  transaction,  this  section  is  remodelled  by  declaring 
that  the  charge  or  transfer  may  be  duly  made  by  an  instrument 
not  under  seal,  and  if  so  made,  the  instrument  and  every  agree- 
ment, stipulation  and  condition  therein  shall  have  the  same 
effect  for  all  purposes  as  if  it  were  made  under  seal  (Land  Titles 
Act,  1 Geo.  Y.  ch.  28,  sec.  102). 

By  the  rules  annexed  to  the  Act,  No.  71  directs  the  use  of  the 
forms  given  in  the  schedule,  and  form  No.  28  is  the  form  (not 
under  seal)  used  in  this  case  by  the  owner,  Bailey,  when  he  mort- 
gaged to  Beatty  in  August,  1891.  That  mortgage  was  to  be  paid 
in  June,  1894,  and  in  the  case  of  an  ordinary  mortgage  under  seal 
the  Statute  of  Limitations  would  bar  at  the  end  of  twenty  years 
— the  mortgage  being  made  before  the  1st  July,  1894  (R.S.O. 
1897,  ch.  72,  sec.  1,  sub-secs.  ( b ) and  ( h )).  In  the  form  given  by  the 
Land  Titles  Act  and  in  the  instrument  which  was  registered  in  this 
case  there  is  nothing  as  to  a covenant  to  pay;  that  term  is  sup- 
plied by  the  statute,  in  sec.  34,  already  quoted,  i.e.,  such  a 
covenant  shall  be  implied  as  against  the  owner  of  the  land  who 
creates  the  charge  which  is  completed  by  the  fact  of  registra- 
tion. So  that  the  obligation  to  pay,  as  by  and  under  a covenant 
to  pay,  is  to  be  regarded  as  a statutory  obligation  placed  upon 
the  owner  for  the  benefit  of  the  lender  or  chargee. 

The  additions  to  sec.  107  made  by4  the  amendment  now  ap- 
pearing in  1 Geo.  V.  ch.  28,  sec.  102,  may  prove  useful  in  litiga- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


151 


tion  arising  upon  the  instrument  in  other  jurisdictions;  but  do 
not  seem  to  be  needed  in  the  present  case. 

The  registered  charge  which  is  created  uno  flatu  with  the 
covenant  to  pay  included  or  implied  by  virtue  of  the  statute,  is 
to  be  regarded  as  the  effective  and  completed  instrument,  binding 
both  land  and  person  so  far  as  security  for  the  money  advanced 
is  concerned;  and,  though  the  land  may  be  discharged  by  an 
act  of  grace  on  the  part  of  the  chargee,  that  does  not  per  se  relieve 
the  covenantor  from  the  payment  of  the  debt  till  after  twenty 
years  have  elapsed  without  action  to  recover  the  claim. 

The  release  given  by  Beatty  was  limited  to  the  land  in  ques- 
tion, and  he  expressly  reserves  his  rights  in  respect  of  the  moneys 
secured  and  to  be  paid.  The  effect  is  to  free  the  land  for  the 
benefit  of  the  first  chargee,  and  so  enable  him  to  realise  more 
speedily  by  sale  of  the  estate,  which  was  not  worth  what  was 
due  on  the  first  charge.  The  effect  of  the  registration  of  this 
cessation  was,  upon  sale,  to  give  the  purchaser  an  absolute  owner- 
ship as  to  the  land,  but  to  leave  unimpaired  the  right  of  the 
plaintiff  to  proceed  for  the  recovery  of  the  amount  due  by  the 
mortgagor,  Bailey:  In  re  Richardson , L.R.  12  Eq.  398;  Bell  v. 
Rowe  (1901),  26  Viet.  L.R.  511,  per  Madden,  C.J. 

The  obligation  to  pay  rests  upon  the  covenant  or  contract 
imposed  by  statute;  and  is,  therefore,  an  action  founded  upon 
a specialty,  within  the  meaning  of  the  Statute  of  Limitations, 
and  is  not  barred  by  lapse  of  time  less  than  twenty  years  from 
the  date  of  default  (which  at  the  earliest  was  in  this  case  1894): 
Cork  and  Bandon  R.W.  Co  v.  Goode  (1853),  13  C.B.  826;  Essery 
v.  Grand  Trunk  R.W.  Co.,  21  O.R.  224,  following  Ross  v.  Grand 
Trunk  R.W.  Co.  (1886),  10  O.R.  447. 

No  defence,  therefore,  arises  by  virtue  of  any  Statute  of  Limita- 
tions or  lapse  of  time. 

The  judgment  below,  therefore,  should  be  entered  against  the 
defendant  on  this  issue. 

The  next  defence,  and  the  one  to  which  effect  was  given  by 
the  County  Court  Judge,  rests  upon  the  equitable  situation  of 
the  parties,  which  I proceed  to  consider. 

The  first  mortgagee  had  a power  of  sale  by  the  terms  of  the 
mortgage  and  the  statutory  charge,  and  could  enforce  a sale 
against  the  mortgagor.  It  may  be  that  the  concurrence  of  the 


D.  C. 
1912 

Beatty 

v. 

Bailey. 

Boyd,  O. 


152 


ONTARIO  LAW  REPORTS. 


D.  C. 
1912 

Beatty 

v. 

Bailey. 

Boyd,  C. 


[VOL. 


then  owner  of  the  equity  of  redemption  and  the  second  mort- 
gagee assisted  in  the  more  inexpensive  way  of  realising  upon  the 
property;  but  it  is  undoubted  that  the  land  was  disposed  of  by 
the  paramount  act  of  the  first  mortgagee;  and  the  law  is,  that, 
if  a surplus  remains  unpaid  after  the  exercise  of  a power  of  sale, 
the  mortgagee  may  sue  for  its  recovery  by  action  on  the  covenant: 
Rudge  v.  Richens  (1873),  L.R.  8 C.P.  358.  The  release  of  the  land 
by  the  second  chargee  was  only  to  facilitate  either  the  foreclosure 
or  the  sale  of  the  property  by  the  first  mortgagee — as  it  appeared 
then  that  the  land  was  not  of  value  to  satisfy  even  the  first  mort- 
gage. Had  the  land  been  foreclosed  by  the  first  mortgagee, 
that  change  of  the  property  would  not  have  interfered  with  The 
right  of  the  second  mortgagee  (who  was  not  to  blame)  to  sue 
upon  the  covenant.  No  doubt  the  rule  is,  that  the  mortgagee 
suing  on  a covenant  in  the  mortgage  must  ordinarily  be  in  a 
position  to  reconvey  the  land  upon  payment  of  what  is  due. 
But  that  does  not  necessarily  apply  to  the  case  of  a second  mort- 
gagee whose  rights  against  the  land  have  been  extinguished  by 
the  act  of  the  first  mortgagee.  The  law  is  summarised  in  Coote 
thus,  that  the  inability  of  the  mortgagee  to  reconvey  will  not  bar 
the  right  of  action  on  the  covenant  if  such  inability  arises  from 
any  default  of  the  mortgagor:  7th  ed.,  vol.  2,  p.  982.  The 
mortgagor’s  duty  was,  here,  to  pay  off  the  first  mortgage,  and 
so  prevent  the  exercise  of  the  power  of  sale  by  which  the  equity 
of  redemption  was  extinguished.  I think  the  principles  of  deci- 
sion acted  on  in  in  re  Burrell,  Burrell  v.  Smith,  L.R.  7 Eq.  399, 
466,  apply  to  this  case  and  go  to  invalidate  the  judgment  pro- 
nounced by  the  learned  County  Court  Judge. 

I think  judgment  should  be  entered  for  the  amount  claimed 
with  costs  and  costs  of  appeal. 


Latchford,  J.: — I agree. 

Middleton,  J.: — I entirely  agree  with  my  Lord  the  Chan- 
cellor, and  only  desire  to  add  a few  words  out  of  respect  to  the 
learned  Judge  whose  decision  we  are  reversing. 

The  right  of  the  mortgagor,  when  sued  upon  a covenant,  to 
demand  a reconveyance  of  the  mortgaged  property,  discussed  in 
Kinnaird  v.  Trollope  (1888),  39  Ch.D.  636,  and  the  cases  there 
cited,  and  the  equitable  right  to  restrain  such  action  when  the 
mortgagee  has  put  it  out  of  his  power  to  convey,  cannot,  it  seems 


XXVI.] 


ONTARIO  LAW  REPORTS. 


153 


to  me,  be  invoked  where  the  inability  to  reconvey  arises  from 
the  default  of  the  mortgagor  himself.  Here  the  non-payment 
of  the  first  mortgage  made  the  estate  of  the  mortgagee  absolute 
at  law,  and  made  the  right  of  the  plaintiff,  as  second  mortgagee, 
liable  to  foreclosure  in  equity. 

I do  not  think  that  the  consent  given  by  the  plaintiff  to  the 
immediate  exercise  by  the  first  mortgagee  of  his  right  to  sell  the 
lands  operates  to  release  the  covenant.  He  has  at  most  waived 
the  taking  of  formal  legal  proceedings  by  the  first  mortgagee, 
which  would  not  be  to  the  advantage  of  any  one;  and,  more- 
over, in  his  waiver  he  has  expressly  reserved  his  rights  against 
the  mortgagor. 

It  is  clear,  to  me  at  least,  that  the  loss  of  the  property  was 
occasioned,  not  by  the  action  of  the  plaintiff,  but  by  the  rights 
conferred  upon  the  first  mortgagee  by  his  security,  and  by  the 
default  of  the  defendant  himself.  This  brings  the  case  within 
the  principle  enunciated  in  In  re  Burrell,  Burrell  v.  Smith,  L.R. 
7 Eq.  399. 

In  Palmer  v.  Hendrie  (1860),  28  Beav.  341,  the  plaintiff  failed 
to  recover  because  he  assented  to  the  purchase-money  being  paid 
to  the  owner  of  the  equity  of  redemption,  instead  of  insisting 
upon  it  being  applied  in  discharge  of  the  mortgage  debt.  It  was 
this,  and  not  the  concurrence  in  the  sale,  that  was  deemed  im- 
proper 


D.  C. 
1912 

Beatty 

v. 

Bailey. 

Middleton,  J. 


Appeal  allowed. 


154 


ONTARIO  LAW  REPORTS. 


D.  C. 
1912 

April  10 


[DIVISIONAL  COURT.] 

Rudd  v.  Cameron. 

Slander — Words  Spoken  of  Plaintiff  in  Reference  to  his  Trade — Publica- 
tion— Speaking  Brought  about  by  Action  of  Plaintiff — Publication — 
Evidence  for  Jury — Privileged  Occasion — Absence  of  Belief  in  Truth 
of  Words — Malice — Damages — Quantum. 

In  an  action  for  defamatory  words  alleged  to  have  been  spoken  by  the 
defendant  of  the  plaintiff  in  the  way  of  his  trade,  the  plaintiff  testi- 
fied that,  having  learned  that  statements  injuriously  affecting  him 
were  in  circulation,  and  being  unable  to  trace  them  to  their  source,  he 
employed  two  detectives  “for  the  purpose  of  ascertaining  the  facts 
and  getting  information  for  his  solicitors.”  The  detectives,  having  made 
the  acquaintance  of  the  defendant,  told  him  that  they  were  going  to 
erect  a club  house,  and  that  the  plaintiff  was  anxious  to  secure  the 
contract  for  building  it.  It  was  upon  what  the  defendant  then  said 
that  the  action  was  based:  — 

Held,  that,  although  the  speaking  of  the  words  was  brought  about  by  the 
action  of  the  plaintiff,  there  was  evidence  of  publication  for  the  jury. 
Review  of  the  authorities. 

Duke  of  Brunswick  v.  Harmer  (1849),  14  Q.B.  185,  followed. 

Held,  also,  that,  although  the  occasion  on  which  the  words  were  spoken 
was  privileged,  there  was  evidence,  which  the  jury  believed,  that  there 
was  no  truth  in  the  statements  made  by  the  defendant;  and  evidence 
that  he  knew  that  they  were  untrue,  or  that  he  made  them  recklessly, 
not  caring  whether  they  were  true  or  false;  and  evidence  from  which 
malice  might  be  inferred. 

Held , also,  that,  while  the  damages  assessed  by  the  jury  ($1,000)  were 
substantial,  they  were  not,  in  view  of  the  defendant’s  conduct  through- 
out and  his  not  having  gone  into  the  box  to  testify  on  his  own  behalf, 
so  excessive  as  to  warrant  the  Court  in  setting  aside  the  verdict. 
Judgment  of  Britton,  J.,  upon  the  verdict  of  a jury,  affirmed. 

An  appeal  by  the  defendant  from  the  judgment  of  Britton, 
J.,  of  the  15th  November,  1911,  in  favour  of  the  plaintiff,  upon 
the  verdict  of  a jury  at  the  trial  at  Pembroke,  in  an  action  for 
defamatory  words  alleged  to  have  been  spoken  by  the  defendant 
of  the  plaintiff  in  the  way  of  his  trade. 

February  27.  The  appeal  was  heard  by  a Divisional  Court 
composed  of  Meredith,  C.J.C.P.,  Teetzel  and  Kelly,  JJ. 

W.  M.  Douglas,  K.C.,  for  the  defendant,  argued  that  there 
was  no  evidence  of  publication,  and  that  the  words  were  spoken 
on  a privileged  occasion,  and  there  was  no  evidence  of  malice. 
In  any  event,  the  damages,  if  any,  should  have  been  merely  nom- 
inal. On  the  question  of  publication,  he  contended  that,  where 
the  plaintiff  procures  some  one  to  go  to  the  defendant  for  the 
purpose  of  provoking  him  to  utter  defamatory  words,  there  is  no 
publication.  In  support  of  this  proposition  he  cited  Starkie  on 


XXVI.] 


ONTARIO  LAW  REPORTS. 


155 


Slander,  3rd  ed.,  pp.  381  and  514,  where  the  cases  of  King  v. 
Waring  (1803),  5 Esp.  13,  and  Smith  v.  Wood  (1813),  3 Camp.  323, 
are  referred  to;  and  Weather ston  v.  Hawkins  (1786),  1 T.R.  110. 

E.  F.  B.  Johnston,  K.C.,  for  the  plaintiff,  urged  that  there  was 
sufficient  evidence  of  malice  to  take  away  the  qualified  privilege. 
He  also  pointed  out  that  there  had  been  no  evidence  called  for 
the  defence.  As  to  publication,  it  was  true  that  there  were  cases 
which  said  that  if  a trap  were  laid  to  make  a man  say  what  he 
would  not  have  said  voluntarily,  there  would  be  no  publication. 
But  here  there  had  been  no  trap  laid.  The  detectives  did  not  go 
to  the  defendant  to  get  him  to  make  the  slanderous  statements, 
but  to  find  out  if  he  had  been  making  them.  There  had  been 
publication  in  this  case.  He  referred  to  Duke  of  Brunswick  v. 
Harmer  (1849),  14  Q.B.  185. 

Douglas,  in  reply,  referred  to  Odgers  on  Libel  and  Slander, 
5th.  ed.,  p.  296. 

April  10.  The  judgment  of  the  Court  was  delivered  by 
Meredith,  C.J.: — The  appeal  is  rested  upon  two  grounds:  (1) 
that  there  was  no  evidence  of  publication;  and  (2)  that  the 
occasion  upon  which  the  words  were  spoken  was  privileged  and 
there  was  no  evidence  of  malice;  and  it  was  also  contended  that 
the  damages  awarded  ($1,000)  are  excessive. 

According  to  the  testimony  of  the  respondent,  having  learned 
that  statements  affecting  him  similar  to  those  alleged  to  have 
been  made  by  the  appellant,  and  which  form  the  basis  of  the  action, 
were  in  circulation,  and  being  unable  to  trace  them  to  their  source, 
he  employed  two  detectives  “for  the  purpose  of  ascertaining  the 
facts  and  getting  information  for  his  solicitors,”  which  I under- 
stand to  mean  for  the  purpose  of  finding  out  the  author  of  the 
statements  and  bringing  an  action  against  him. 

The  detectives,  having  made  the  acquaintance  of  the  appellant, 
adopted  the  ruse  of  telling  him  that  they  were  going  to  erect  a 
club  house  in  the  vicinity  of  Arnprior,  and  that  the  respondent 
was  anxious  to  secure  the  contract  for  building  it.  Their  object, 
no  doubt,  was  to  induce  the  appellant  to  speak  his  mind  as  to  the 
respondent,  and  in  this  they  appear  to  have  succeeded,  for  it  is 
upon  what  was  then  said  by  the  appellant  that  the  action  is  based. 

The  occasion  upon  which  the  words  were  thus  spoken  was 


D.  C. 
1912 

Rudd 

v. 

Cameron. 


156 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

Rudd 

v. 

Cameron. 
Meredith,  C.J. 


privileged;  but  it  is  contended  by  the  learned  counsel  for  the 
appellant  that,  the  speaking  of  them  having  been  brought  about 
by  the  action  of  the  respondent  himself,  there  was  no  publication; 
and  in  support  of  that  contention  he  cited  King  v.  Waring,  5 Esp. 
13;  Smith  v.  Wood,  3 Camp.  323,  14  R.R.  752;  and  Starkie  on 
Slander,  3rd  ed.,  pp.  381  and  514. 

King  v.  Waring  was  an  action  for  a libel  contained  in  a letter 
written  by  the  female  defendant,  and  Lord  Alvanley,  C.J.,  having 
stated  that  it  had  been  decided  that  giving  a character  to  a servant 
however  injurious  to  him,  yet  if  fairly  given,  would  not  sustain 
an  action,  went  on  to  say:  “But  if  the  letter  was  procured  by 
another  letter,  not  written  with  a fair  view  of  inquiring  a char- 
acter, but  to  procure  an  answer,  upon  which  to  found  an  action 
for  a libel,  such  evidence,  I think,  ought  not  to  be  admitted;” 
but,  as  the  learned  Judge  held  that  this  was  not  proved,  his  state- 
ment is  but  an  obiter  dictum . 


In  Smith  v.  Wood,  the  action  was  for  a libel  upon  the  plaintiff 
in  the  shape  of  a caricature  print  entitled,  “The  inside  of  a parish 
workhouse  with  all  abuses  reformed.”  A witness  having  stated 
that,  having  heard  that  the  defendant  had  a copy  of  this  print, 
he  went  to  his  house  and  requested  liberty  to  see  it,  and  the  de- 
fendant thereupon  produced  it,  and  pointed  out  the  figure  of  the 
plaintiff  and  the  other  persons  it  ridiculed;  and  this,  Lord  Ellen- 
borough  ruled,  was  not  sufficient  evidence  of  publication  to  support 
the  action;  and  the  plaintiff  was  nonsuited. 

It  does  not  appear  from  this  statement  of  the  facts  that  the 
plaintiff  had  sent  the  witness  to  request  liberty  to  see  the  carica- 
ture. Mr.  Odgers,  however,  in  his  work  on  Libel  and  Slander, 
5th  ed.,  p.  179,  states  as  the  facts  of  the  case  that  “the  plaintiff, 
hearing  that  defendant  had  in  his  possession  a copy  of  a libellous 
caricature  of  the  plaintiff,  sent  an  agent  who  asked  to  see  the  pic- 
ture, and  the  defendant  shewed  it  to  him.” 


In  stating  that  the  person  to  whom  the  caricature  was  shewn 
was  sent  to  request  that  it  should  be  shewn,  Mr.  Odgers  is,  I think, 
in  error;  and  in  this  view  I am  supported  by  the  report  of  the 
case  and  by  what  appeared  in  the  earlier  editions  of  Mr.  Starkie’s 
treatise,  where  attention  is  called  to  the  fact  that  “there  was  no 
evidence  to  shew  that  the  plaintiff  was  in  privity  with  the  witness : ” 
2nd  ed.,  vol.  2,  p.  87,  note  (i).  In  the  same  edition,  vol.  1,  p.  456, 


XXVI.] 


ONTARIO  LAW  REPORTS. 


157 


the  facts  of  the  case  are  stated  as  they  appear  in  the  report  in  3 D-  c- 

1912 

Camp.  See  also  3rd  ed.,  p.  381,  and  note  (i)  on  p.  514;  4th  ed.  

(Folkard),  p.  374,  note  (s),  p.  524,  note  (n);  5th  ed.  (Folkard)  Rudd 
p.  409,  note  (/),  p.  441,  note  k.;  6th  ed.  (Folkard),  p.  409,  note  Cameron. 

'(/)>  mid  p.  441.  ^ Meredith,  C.J. 

In  the  last  edition  of  Folkard  (7th  ed.),  Smith  v.  Wood  is  re- 
ferred to,  on  pp.  166  and  263.  In  this  edition  the  matter  has  been 
re-arranged,  and  the  reference  on  p.  166  appears  in  chapter  11, 
which  deals  with  communications  in  discharge  of  duty;  and  the 
statement  in  the  text  is,  that,  “ where  the  publication  of  the  de- 
famatory matter  was  procured  by  the  contrivance  of  the  plaintiff, 
with  a view  to  the  foundation  of  an  action  against  the  defendant, 
the  communication  may  be  privileged  on  the  ground  that  the 
plaintiff  himself  was  the  voluntary  author  of  the  mischief  com- 
plained of;”  and  Smith  v.  Wood,  Weatherston  v.  Hawkins,  1 T.R. 

110,  and  Warr  v.  Jolly  (1834),  6 C.  & P.  497,  are  referred  to  as 
the  authority  for  the  statement. 

The  dictum  of  Lord  Alvanley,  C.J.,  in  King  v.  Waring,  and 
what  was  said  by  him  in  Rogers  v.  Clifton  (1803),  3 B.  & P.  587, 
at  p.  592,  are  also  referred  to  for  the  statement  that,  “ where  a 
plaintiff,  knowing  the  character  which  his  master  will  give,  pro- 
cures it  to  be  given  for  the  sake  of  founding  an  action  upon  it, 
lie  will  not  be  allowed  to  recover.” 

The  reference  on  p.  263  is  merely  a statement  of  the  facts  of 
Smith  v.  Wood  and  of  the  ruling  of  Lord  Ellenborough,  C.J.,  as 
reported  in  3 Camp. 

It  would  appear,  therefore,  that  the  first  ground  of  appeal  has 
no  judicial  decision,  but  only  the  dictum  of  Lord  Alvanley,  C.J.,  in 
King  v.  Waring,  to  support  it. 

Mr.  Odgers  points  out  (p.  180)  that  “in  many  of  the  older 
cases-the  Judges  say,  ‘there  is  no  sufficient  publication  to  support 
the  action/  when  they  mean  in  modern  parlance  that  the  pub- 
lication was  privileged  by  reason  of  the  occasion;”  and  this  may 
have  been  what  was  meant  by  Lord  Alvanley,  C.J.,  as,  I think, 
appears  from  what  was  said  by  him  in  Rogers  v.  Clifton,  3 B.  & P. 

587,  at  p.  592.  That  was  an  action  by  a servant  against  his 
former  master  for  an  alleged  libel  contained  in  a letter  written 
by  the  master  to  a Mr.  Hand,  to  whom  the  plaintiff  had  applied 
for  a place,  and  Lord  Alvanley,  speaking  of  this,  said:  “It  is 


158 


ONTARIO  LAW  REPORTS. 


B.  C. 
1912 

Rudd 

v. 

Cameron. 

Meredith,  C.J. 


[VOL. 


material  also  to  observe  that,  when  the  plaintiff  in  this  case  applied 
to  Mr.  Hand  for  his  place,  and  referred  him  to  the  defendant,  he 
did  not  tell  him  that  the  defendant  would  give  him  a good  char- 
acter; had  he  done  so,  I should  have  suspected  that  he  wished  to 
lay  a trap  for  the  defendant,  and  procure  evidence  to  support  this 
action;  in  such  a case  I should  hold  a party  not  at  liberty  to  ascribe 
the  character  given  by  his  master  to  malice,  when  he  had  only 
drawn  from  him  that  which  he  had  a right  to  expect.” 


However  this  may  be,  in  the  comparatively  recent  case  of 
Duke  of  Brunswick  v.  Harmer  (1849),  14  Q.B.  185,  a different  view 
was  taken  by  the  Court  of  Queen’s  Bench.  The  action  was  for 
libel  published  in  a newspaper  more  than  seventeen  years  before 
action;  the  Statute  of  Limitations  was  pleaded,  and  it  was  held 
that  it  was  negatived  by  proof  that  a single  copy  had  been  pur- 
chased from  the  defendant  for  the  plaintiff  by  his  agent  within 
six  years.  The  libel  was  originally  published  in  18,30;  two  copies 
of  the  newspaper  were  produced  at  the  trial;  one  copy  had  been 
obtained  from  the  British  Museum,  and  the  other  had  been  pur- 
chased, before  the  commencement  of  the  action  in  1848,  at  the 
newspaper  office  of  the  defendant,  by  a witness  who  on  cross- 
examination  stated  that  he  had  been  sent  by  the  plaintiff  tq  make 
the  purchase  and  had  handed  the  paper  when  purchased  to  the 
plaintiff.  It  was  contended  by  the  defendant  that  this  latter  was 
not  such  a publication  as  would  support  the  issue.  The  presiding 
Judge  overruled  the  objection.  On  a motion  for  a new  trial  the 
objection  was  renewed,  and  it  was  argued  by  counsel  for  the  de- 
fendant that  the  publication  proved  was  in  law  a publication  to 
the  plaintiff  himself,  and  that  it  could  not  be  the  foundation  of  a 
civil  action.  Coleridge,  J.,  in  delivering  the  judgment  of  the 
Court,  after  referring  to  the  facts  and  the  contention  of  the  de- 
fendant’s counsel,  said:  “And,  in  some  sense,  it  is  true  that  it 
was  a sale  and  delivery  to  the  plaintiff;  but  we  think  it  was  also 
a publication  to  the  agent.  . . . The  defendant,  who,  on  the 

application  of  a stranger,  delivers  to  him  the  writing  which  libels 
a third  person,  publishes  the  libellous  matter  to  him,  though  he 
may  have  been  sent  for  the  purpose  of  procuring  the  work  by  that 
third  person  . . . The  act  is  complete  by  the  delivery;  and 

its  legal  character  is  not  altered,  either  by  the  plaintiff’s  procure- 
ment or  by  the  subsequent  handing  over  of  the  writing  to  him. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


159 


Of  course  that  this  publication  was  by  the  procurement  of  the  D-  °- 
plaintiff  is  not  material  to  the  question  we  are  now  considering.”  1912 

In  the  view  of  Mr.  Odgers,  pp.  179-180,  this  case,  so  far  as  the  R^DD 

question  of  publication  merely  is  concerned,  overrules  King  v.  Cameron. 
Waring  and  Smith  v.  Wood;  and  Sir  Frederick  Pollock’s  note  to  Meredith,  c.j. 
Smith  v.  Wood  (14  R.R.  752)  is,  that  Lord  Ellenborough’s  ruling 
“does  not  seem  consistent  with  Duke  of  Brunswick  v.  Harmer.” 

Neither  King  v.  Waring  nor  Smith  v.  Wood  was  cited  or  re- 
ferred to  in  Duke  of  Brunswick  v.  Harmer;  the  former  probably 
for  the  reason  suggested  by  Mr.  Odgers,  that  it  related  only  to  the 
question  of  privilege;  and  the  latter  for  the  same  reason,  if  the 
facts  of  it  were  as  stated  by  Mr.  Odgers,  or  for  the  reason  that  it 
had  no  application,  if  the  facts  were  as  stated  in  the  report  in 
3 Camp. 

The  question  has  been  discussed  and  passed  upon  in  many 
cases  in  the  United  States,  and  among  them  in  Gordon  v.  Spencer 
(1829),  2 Blackf.  (Ind.)  286,  288;  Yeates  v.  Reed  (1838),  4 Blackf. 

(Ind.)  463,  465;  Jones  v.  Chapman  (1839),  5 Blackf.  (Ind.)  88; 

Haynes  v.  Leland  (1848),  29  Me.  233,  234,  243;  Sutton  v.  Smith 
(1850),  13  Mo.  120,  123,  124;  Nott  v.  Stoddard  (1865),  38  Vt.  25, 

31;  Heller  v.  Howard  (1882),  11  111.  App.  554;  White  v.  Newcomb 
(1898),  25  App.  Div.  N.Y.  397,  401;  O’Donnell  v.  Nee  (1898), 

86  Fed.  Repr.  96;  Railroad  v.  Delaney  (1899),  102  Tenn.  289, 

294,  295;  and  Shinglemeyer  v.  Wright  (1900),  124  Mich.  230,  240. 

See  also  Cyc.,  vol.  25,  pp.  '370-1.  In  most  of  these  cases  the 
supposed  ruling  of  Lord  Ellenborough,  C.J.,  in  Smith  v.  Wood 
and  the  opinion  expressed  by  Lord  Alvanley,  C.J.,  in  King  v. 

Waring  were  recognised  as  correct  statements  of  the  law,  and 
followed. 

Upon  the  whole,  we  are  of  opinion  that  we  should  follow 
Duke  of  Brunswick  v.  Harmer,  and,  following  it,  hold  that  there 
was  evidence  for  the  jury  of  publication,  and  that  the  first  objec- 
tion, therefore,  fails. 

The  second  ground  of  appeal  also  fails;  there  was  evidence, 
which  the  jury  believed,  that  there  was  no  truth  in  the  statements 
made  by  the  defendant;  and  there  was  ample  evidence,  out  of  the 
appellant’s  own  mouth  on  his  examination  for  discovery,  that  he 
knew  they  were  untrue,  or  that  he  made  them  recklessly,  not  caring 
whether  they  were  true  or  false;  and  there  was  evidence  from  which 


160 

ONTARIO  LAW  REPORTS.  [vol. 

D.  C. 
1912 

malice  might  be  inferred,  in  the  bad  feeling  which  had  existed  on 
the  part  of  the  appellant  towards  the  respondent,  and  his  state- 

Rudd 

V. 

Cameron. 

ments  to  the  respondent’s  book-keeper  and  stenographer,  Alice 
Miller. 

Meredith,  C.J. 

The  damages  are  substantial;  but,  in  view  of  the  appellant’s 
conduct  throughout  and  his  not  having  gone  into  the  box  to  testify 
on  his  own  behalf,  we  cannot  say  that  they  are  so  excessive  as  to 
warrant  the  Court  in  setting  aside  the  verdict. 

The  appeal  is  dismissed  with  costs. 

1912 

[IN  CHAMBERS.] 

Re  Const antineau  and  Jones. 

April  11. 

% 

Costs — Crimlinal  Proceedings — -Order  for  Payment  by  Prosecutor  of  Costs 
of  Accused — Taxation — Right  of  Appeal — Criminal  Code,  secs.  689,  1047 
— Construction  of  Order — Right  to  Costs  of  Preliminary  Inquiry  be- 
fore Police  Magistrate — Mandatory  Order. 

No  appeal  lies  from  the  taxation  of  costs  pursuant  to  an  order  of  the 
Court,  under  sec.  689  of  the  Criminal  Code,  for  payment  by  the  prose- 
cutor of  the  costs  of  the  accused. 

Section  1407  of  the  Criminal  Code  is  wide  enough  to  apply  to  all  costs 
ordered  to  be  paid  under  any  of  the  earlier  provisions  of  the  Code; 
and,  there  being  no  tariff  of  fees  provided  with  respect  to  criminal 
proceedings,  the  tariff  in  force  with  respect  to  the  costs  of  civil  pro- 
ceedings is  applicable;  but  the  right  of  appeal  given  in  civil  cases  is 
not  made  to  apply  by  the  mere  introduction  of  the  civil  tariff. 

The  order  for  payment  of  costs  recited  the  information  laid  against  the 
accused  before  a Police  Magistrate,  the  committal  of  the  accused  for 
trial,  and  the  notice  of  discontinuance  given  by  the  complainant;  and 
the  award  was  “of  the  costs  occasioned  by  the  said  proceedings:” — 
Held,  that  the  order  adequately  awarded  the  costs  of  the  preliminary  in- 
quiry before  the  Police  Magistrate;  and  that,  upon  the  true  construc- 
tion of  sec.  689,  where  costs  are  awarded  in  general  terms,  these  include 
the  costs  of  the  appearance  on  the  preliminary  inquiry. 

A mandatory  order  was  made  directing  the  local  officer  who  had  taxed  the 
costs  under  the  order  to  tax  and  allow  to  the  accused  his  costs  of  the 
preliminary  proceedings  before  the  Police  Magistrate. 

An  information  was  laid  by  Const  antineau  against  Jones 
before  the  Police  Magistrate  at  L’Orignal  for  the  publication  of 
a defamatory  libel.  Jones  was  committed  for  trial,  and  at  the 
assizes  was  surrendered  by  his  bail;  but,  the  prosecutor  not 
appearing,  was  discharged;  and  an  order  was  made  by  Latch- 
ford,  J.,  for  the  recovery  by  the  accused  (Jones)  from  the  prose- 
cutor (Constantineau)  of  his  (Jones’s)  costs  occasioned  by  the 
proceedings,  the  same  to  be  taxed. 

XXVI.] 


ONTARIO  LAW  REPORTS. 


161 


A bill  of  costs  was  brought  in  before  the  Local  Registrar 
covering  the  proceedings  before  the  Police  Magistrate,  as  well 
as  those  at  the  assizes;  but  the  Local  Registrar,  upon  taxation, 
disallowed  entirely  the  costs  of  the  proceedings  before  the  Police 
Magistrate,  and  largely  reduced  the  bill  in  respect  of  the  costs 
incurred  at  the  assizes. 

Jones  appealed  from  the  taxation. 

April  9.  The  appeal  came  on  for  hearing  before  Middleton, 
J.,  in  Chambers. 

G.  A.  Urquhart,  for  the  appellant. 

H.  S.  White,  for  Constantineau,  objected  that  there  was  no 
appeal  from  the  taxation,  as  the  proceedings  were  under  the 
Criminal  Code,  and  the  provisions  of  the  Consolidated  Rules 
did  not  apply. 

April  11.  Middleton,  J.  (after  setting  out  the  facts  as 
above): — I think  this  objection  is  well  taken.  The  section  of 
the  Criminal  Code  under  which  the  order  for  payment  of  these 
costs  was  made  is  sec.  689.*  It  merely  gives  authority  to  direct 
payment  of  costs.  Section  1047, f I think,  is  wide  enough  to 
apply  not  only  to  costs  ordered  to  be  paid  under  secs.  1044  and 
1045,  but  to  apply  to  all  costs  ordered  to  be  paid  under  any  of  the 
earlier  provisions  of  the  Code.  This  section  indicates  that  where 
there  is  no  tariff  provided  in  respect  to  criminal  proceedings, 
costs  shall  be  taxed  according  to  the  lowest  scale  of  fees  allowed 
in  the  Court  in  which  the  proceeding  is  had  in  a civil  suit.  Power 
is  given  under  sec.  576  to  the  Court  to  provide  by  general  rule 
for  the  costs  to  be  allowed;  but  no  tariff  has  been  promulgated 
under  the  Code;  and,  therefore,  the  tariff  applicable  in  civil  pro- 
ceedings, and  provided  by  the  Judicature  Act  and  Rules,  is 
applicable;  but  under  the  Code  no  appeal  is  given,  nor  is  the 
right  of  appeal  which  is  found  in  civil  cases  made  to  apply  by 
the  mere  introduction  of  the  civil  tariff. 

* 689.  If  the  prosecutor  so  bound  over  at  his  own  request  does  not 
prefer  and  prosecute  such  an  indictment,  or  if  the  grand  jury  does  not  find 
a true  bill,  or  if  the  accused  is  not  convicted  upon  the  indictment  S')  pre- 
ferred, the  prosecutor  shall,  if  the  court  so  direct,  pay  to  the  accused  person 
his  costs,  including  the  costs  of  his  appearance  on  the  preliminary  inquiry. 

t 1047.  Any  costs  ordered  to  be  paid  by  a court  pursuant  to  the  fore- 
going provisions  shall,  in  case  there  is  no  tariff  of  fees  provided  with  respect 
to  criminal  proceedings,  be  taxed  by  the  proper  officer  of  the  court  according 
to  the  lowest  scale  of  fees  allowed  in  such  court  in  a civil  suit. 


Middleton,  J. 

1912 

Re 

Constan- 

tineau 

and 

Jones. 


162 


ONTARIO  LAW  REPORTS. 


Middleton,  J. 

1912 

Re 

Const  an  - 

TINEAIT 

AND 

Jones. 


[VOL. 


Upon  the  argument  it  was  suggested  that  another  remedy 
might  be  open  to  the  applicant,  in  so  far  as  the  Taxing  Officer 
has  failed  to  allow  anything  for  the  costs  incurred  upon  the 
preliminary  inquiry. 

I am  quite  clear  that,  in  the  absence  of  any  appellate  juris- 
diction, I have  no  right  to  interfere  with  the  discretion  of  the 
officer  whose  duty  it  is  to  tax  these  costs;  but  it  seems  to  me 
to  be  equally  plain  that  where  the  Taxing  Officer  has  failed  to 
discharge  his  function  at  all,  and  has  failed  to  make  any  allow- 
ance for  the  costs  of  the  preliminary  inquiry,  the  applicant  has 
the  right  to  come  to  this  Court  to  compel  the  officer  to  exercise 
his  function;  and  it  was  arranged  by  counsel  that,  to  save  the 
expense  of  another  application,  this  may  be  treated  as  a motion 
for  a mandatory  order,  and  that  I should  deal  with  the  questions 
which  would  be  open  upon  such  an  application. 

The  Taxing  Officer  has  proceeded  upon  the  theory  that  the 
trial  Judge  did  not  intend  to  award  the  costs  of  the  preliminary 
inquiry,  and  that  the  language  used  in  the  judgment  is  not  suffi- 
cient to  award  these  costs.  I have  had  the  opportunity  of  con- 
sulting the  learned  trial  Judge,  and  he  tells  me  that  it  was  his 
intention  to  make  an  unrestricted  award  of  all  costs  over  which 
he  had  any  jurisdiction;  and  I think  that  the  judgment  adequately 
awards  the  costs  of  the  preliminary  inquiry. 

The  formal  judgment  entered  recites  the  information  before 
the  Police  Magistrate  and  the  committal  and  the  notice  of  dis- 
continuance given  by  the  complainant;  and  the  award  is  “of 
the  costs  occasioned  by  the  said  proceedings.” 

In  the  second  place,  I think  that,  upon  the  true  construction 
of  sec.  689,  where  costs  are  awarded  in  general  terms,  these  in- 
clude the  costs  of  the  appearance  on  the  preliminary  inquiry. 
The  word  “including”  is  equivalent  to,  “which  are  to  include.” 
It  would  have  been  well,  when  the  judgment  was  settled,  to  have 
avoided  any  question  by  following  the  precise  words  of  the 
statute;  but,  when  I find  that  the  words  are  capable  of  the  wider 
meaning,  and  that  the  learned  trial  Judge  intended  his  judgment 
to  have  the  wider  meaning,  I have  no  hesitation  in  giving  to  the 
words  used  a meaning  which  conforms  to  the  actual  intention. 

The  motion  thus  amended  will  be  dealt  with  by  determining 
that  I have  no  appellate  jurisdiction,  and  cannot,  therefore,  deal 


XXVI.]  ONTARIO  LAW  REPORTS.  163 

with  the  appeal,  as  an  appeal;  but  a mandatory  order  will  go  Mld<^on>J- 
to  the  local  officer  directing  him  to  tax  and  allow  to  the  applicant  1912 
(Jones)  his  costs  of  the  preliminary  proceedings  before  the  Police 
Magistrate.  As  success  is  divided,  I make  no  award  of  costs.  Constan- 

TINEAU 

AND 

Jones. 


[IN  THE'  COURT  OR  APPEAL.] 

Re  Mountain. 

Will — Construction — Secured  Debts — Postponement  of  Payment — Accumu- 
lation of  Income — Exoneration  of  General  Estate — Charitable  Gift — 
Immediate  Vesting — Condition — Gift  over  to  Charity — Rule  against 
Perpetuities — Restraint  on  Alienation — Election  between  Gifts — Ques- 
tions for  Determination  upon  Summary  Application  for  Construc- 
tion of  Will — Costs. 


C.  A. 
1910 

Nov.  14. 
1912 

April  15. 


The  testator,  who  died  in  1910,  by  his  will,  made  in  1902,  directed  that  his 
just  debts  and  general  expenses  should  be  paid  as  soon  as  possible  after 
his  decease;  but  that  the  payment  of  debts  secured  by  mortgages  on 
real  estate  or  for  which  his  bank  stock  had  been  temporarily  trans- 
ferred should  be  postponed  until  they  had  been  paid  off  from  the  in- 
come of  his  estate;  and  that  none  of  his  bank  stock  or  other  securities 
were  to  be  sold,  but  were  to  be  distributed  according  to  their  market 
value  at  the  time  of  distribution.  He  also  directed  that  his  real 
estate  in  the  Isle  of  Wight  was  not  to  be  sold  till  after  a tunnel  or 
bridge  should  be  made  between  the  island  and  the  mainland,  if  such 
should  be  made  within  the  lifetime  of  any  of  his  executors  or  twenty- 
one  years  after.  He  then  gave  all  his  property  to  his  executors,  “after 
payment  of  my  just  debts  and  funeral  expenses  as  aforesaid,  to  be 
held  in  trust  for  certain  purposes  specifically  set  out  in  a number  of 
separate  paragraphs.  The  first  was,  out  of  the  revenue  of  his  property 
to  pay  his  wife  £150  a year,  and  to  allow  her  the  use,  rent  free,  dur- 
ing her  life,  of  “Pinehurst  House,  furnished,  or  of  whichever  house  of 
mine  may  be  our  home  at  time  of  my  decease.”  In  the  11th  paragraph, 
he  specified  a number  of  parcels  of  real  estate,  and  directed  that  all 
these  should  be  conveyed  to  the  Synod  of  the  Diocese  of  Ottawa  to  be 
held  by  the  Synod  in  trust  for  an  endowment  of  the  bishopric  of  Corn- 
wall, “whenever  the  Bishop  of  Cornwall  is  being  appointed.  If  the 
yearly  income  from  said  properties,  together  with  any  other  official 
income  from  whatever  source,  be  insufficient  to  produce  a salary  of 
$2,000  a year  for  a suffragan  Bishop  or  $3,000  yearly  for  an  inde- 
pendent Bishop  . . . the  income  of  my  sixty  Hudson  Bay  shares 
. . . or  such  part  ...  as  may  be  requisite  shall  be  applied 

towards  the  same  object.”  Paragraph  12:  “But  if  it  be  unnecessary  for 
said  purpose  so  to  apply  the  income  of  said  sixty  Hudson  Bay  shares 
. . . I hereby  bequeath  these  . . . shares  to  the  University  of 
Bishop’s  College,  Lennoxville  ...  to  found  and  endow  ...  a 
Mission  Fellowship.”  Paragraph  19  : “ . . . As  soon  as  the  obli- 

gations on  my  personal  and  real  estate  have  been  discharged,  including 
the  payment  of  $5,000  to  the  University  of  Windsor,  N.S.,  for  which 
I gave  ‘my  note  of  hand,’  then  all  my  real  estate  in”  (three  specified 
places)  “shall  be  transferred  to  the  Synod  of  the  Diocese  of  Ottawa  to 
be  held  in  trust  for  the  proposed  new  Diocese  o,r  suffragan  Bishop  of 
Cornwall  . . . subject  to  the  claim  of  residence,  in  one  or  other  of 
my  houses,  of  my  . . . wife  . . . After  all  existing  claims  on 
my  estate  real  and  personal  as  hereinabove  described  shall  have  been 
satisfied  then  the  accumulation  of  all  rents  shall  be  safely  invested  to 


164 


ONTARIO  LAW  REPORTS. 


[VOL. 


form  a fund  for  duly  fitting  up  the  house”  (describing  it)  “as  a suit- 
able residence  for  the  future  Bishop  of  Cornwall  . . . Para- 

graph 20:  “I  have  made  all  the  above  bequests  to  the  suffragan  bish- 
opric or  independent  See  of  Cornwall  . . . But  if  the  appoint- 

ment ...  of  such  a bishop  do  not  take  place  within  twenty-five 
years  after  my  death  . . . the  properties  which  had  been  intended 
for  the  endowment  of  the  See  of  Cornwall  shall  also  by  transfer  become 
the  property  of  Bishop’s  'College,  Lennoxville,  subject  to”  (certain 
charges)  “and  in  trust  towards  the  endowment  of  a Professorship  of 
Natural  Science.”  Upon  appeal  from  an  order  made  upon  summary 
application  under  Con.  Rule  938: — • 

Held,  that  the  gift  to  the  Synod  was  not  void  as  offending  the  rule 
against  perpetuities:  it  was  a vested  charitable  gift,  but  to  be  divested 
in  a certain  event,  also  in  favour  of  a charity. 

Held,  also,  that  the  income  might  be  applied  to  the  exoneration  of  the 
general  estate,  to  the  extent,  if  any,  to  which  it  might  be  called  upon 
to  answer  the  secured  debts. 

Held,  as  to  conditions  in  the  will  said  to  be  in  restraint  of  sale  of  certain 
portions  of  the  testator’s  estate,  and  as  to  the  alleged  obligation  of  the 
testator’s  widow  to  elect  between  the  gifts  to  her  of  a life  estate  in  the 
testator’s  Cornwall  house  and  in  a house  in  the  Isle  of  Wight,  that 
the  questions  submitted  could  not  be  determined  upon  the  present 
application. 

Held,  also,  that  the  Court  should  not  disturb  the  disposition  of  the  costs 
made  by  the  order  in  appeal,  by  giving  the  Synod  costs  as  between  solici- 
tor and  client. 

Per  Moss,  'C.J.O.: — In  such  cases,  the  award  of  costs  as  between  solicitor 
and  client  is  generally  confined  to  the  applying  trustee  or  executor. 

Judgment  of  Boyd,  C.,  varied. 


C.  A. 
1910 

Re 

Mountain. 


Motion  by  the  executors  of  the  will  of  the  Reverend  Jacob 
Jehoshaphat  Salter  Mountain,  deceased,  upon  originating  notice, 
for  an  order  determining  certain  questions  arising  in  the  admin- 
istration of  the  estate  of  the  deceased,  involving  the  construction 
of  his  will  and  codicils. 


The  testator  died  on  the  1st  May,  1910.  His  will  was  dated 
the  25th  June,  1902.  The  material  parts  of  it  were  as  follow: — 
lstly.  I will  and  direct  that  all  my  just  debts  and  the  expenses 
of  my  funeral  . . . be  fully  paid  and  discharged  as  soon  as 
possible  after  my  decease. 

Nevertheless  the  payment  of  debts  secured  by  mortgages 
on  real  estate,  whether  in  Canada,  the  Isle  of  Wight,  or  elsewhere, 
or  those  for  which  an  equivalent  portion  of  my  bank  stock  has  been 
temporarily  transferred,  shall  be  postponed  until  they  have  been 
paid  off  from  the  income  of  my  estate.  And  none  of  my  bank 
stock  or  other  securities  are  to  be  sold,  but  are  to  be  distributed 
according  to  their  market  value  at  the  time  of  distribution. 

My  real  estate  in  England  or  the  Isle  of  Wight  is  not  to  be 
sold  till  after  a tunnel  or  bridge  is  made  between  said  Isle  and  the 
mainland  (if  such  should  be  made  within  the  lifetime  of  my 


XXVI.] 


ONTARIO  LAW  REPORTS. 


165 


executors  or  twenty-one  years  after),  after  which  time  it  may 
be  sold,  if  my  executors  should  consider  that  such  sale  would 
benefit  my  estate. 

2ndy.  I will  devise  and  bequeath  to  my  executors  all  my 
property  estate  and  effects  real  and  personal  movable  and  immov- 
able of  whatsoever  kind  or  nature  and  wheresoever  situated  or  to 
be  found  which  may  belong  to  me  at  the  time  of  my  decease  after 
payment  of  my  just  debts  and  funeral  expenses  as  aforesaid  to 
be  held  in  trust  for  the  following  purposes,  that  is  to  say: — 

1st.  Out  of  the  revenue  thereof,  to  pay  to  my  wife  Louisa 
Mira  yearly  (for  as  long  a time  as  she  may  outlive  me,  except  as 
hereinafter  provided)  one  hundred  and  fifty  pounds,  the  same  as 
I mentioned  in  a codicil  to  my  last  will  which  codicil  was  signed 
after  our  marriage  at  Shanklin,  Isle  of  Wight,  and  a duplicate  of  it 
left  with  her  sister  Kate,  said  sum  to  include  her  right  of  dower, 
and  to  be  made  up  partly  of  what  would  be  a fair  rent  for  my 
executors  to  charge  on  my  property  now  called  “Mira  Cottage” 
on  the  Winthrop  Highlands,  in  the  suburbs  of  Boston,  Mass. — or 
in  case  of  this  property  being  sold,  of  five  per  cent,  interest  on 
the  proceeds.  . . . 

She  is  also  to  have  the  use,  rent  free,  during  the  time  of  her 
natural  life,  of  this  “Pinehurst  House,”  furnished,  or  of  whichever 
house  of  mine  may  be  our  home  at  time  of  my  decease.  . . . 

2nd.  To  pay  four  thousand  dollars  towards  the  endowment 
of  the  “Bishop  George  Jehoshaphat  Mountain  Memorial  Mission 
Fund”  now  in  process  of  formation  for  the  support  of  Missions 
within  the  territory  which  now  forms  the  Diocese  of  Quebec — so 
soon  as  another  four  thousand  dollars  shall  have  been  added  to 
said  fund  by  individual  subscribers  after  my  death.  . . . 

[Then  followed  a number  of  small  legacies.] 

9th.  To  allow  the  Rev.  S.  Gower  Poole,  or  the  future  Rector 
or  Rectors  of  the  Church  of  the  Good  Shepherd,  to  reside  in  the 
house  now  occupied  by  him,  unless  Cornwall  should  become  the 
See  of  a Diocese  or  a suffragan  bishopric,  in  which  case  I desire 
his  present  abode  to  become  the  episcopal  residence,  when  he 
(unless  he  were  the  chosen  bishop)  or  his  successor  in  office  would 
have  to  return  to  his  former  residence  . . . 

10th.  Two  shares  of  my  Montreal  bank  stock  to  be  transferred 
to  the  names  of  “the  Rector  and  Church  Wardens  of  the  Church 


C.  A. 
1910 

Re 

Mountain. 


166 


ONTARIO  LAW  REPORTS. 


[VOL. 


C-A-  of  the  Good  Shepherd”  and  the  interest  of  said  shares  to  be  used 
1910  for  repairs  to  said  Church  and  the  houses  thereto  belonging. 

Re  This  is  to  be  called  “the  Church  and  Church  Property  repair 

Mountain.  j ^ 

fund. 

11th.  All  the  property  purchased  by  me  from  the  executors 
of  the  John  Purcell  estate — also  lot  No.  2 on  Second  street,  form- 
erly known  as  “the  Cattanach  property”  but  now  belonging  to 
me  (on  which  I would  recommend  the  erection  of  two  double 
semi-detached  houses  and  one  single  house) — Also  my  property 
on  “First”  and  “Amelia”  streets  bordering  on  or  opposite  to  the 
“Central  Park” — Also  my  property  No.  2 on  Park  Avenue 
Winthrop  Highlands  near  Boston  Mass.  U.S.  (after  the  death  of 
my  dear  wife,  who  meanwhile  has  the  profits) — Also  the  tract  of 
Prairie  land  half  a mile  square  more  or  less,  which  I hold  near 
Qu’Appelle,  N.W.T. — if  still  unsold,  or,  if  sold,  the  proceeds  of 
the  sale — Also  my  properties  in  the  Isle  of  Wight,  England,  if 
still  unsold,  or,  if  sold,  the  proceeds  of  the  sale  or  an  equivalent 
thereto — All  these  properties  I desire  to  be  legally  conveyed  to 
the  Synod  of  the  Diocese  of  Ottawa  to  be  held  in  trust  by  said 
Synod  for  an  endowment  of  the  bishopric  of  Cornwall  whenever 
the  Bishop  of  Cornwall  is  being  appointed,  whether  as  an  inde- 
pendent Bishop  or  as  a suffragan  to  the  Bishop  of  Ottawa.  If 
the  yearly  income  from  said  properties,  together  with  any  other 
official  income  from  whatever  source,  be  insufficient  to  produce 
a salary  of  two  thousand  dollars  a year  for  a suffragan  Bishop  or 
three  thousand  dollars  yearly  for  an  independent  Bishop,  then, 
in  such  case,  the  income  of  my  sixty  Hudson  Bay  shares  (the 
certificates  of  which  are  now  deposited,  for  safe  keeping,  with  the 
Parr’s  Bank  Limited  in  the  Consolidated  Bank  Building,  Thread- 
needle  Street,  London,  E.C.,  which  also  receives  and  places  to 
my  credit  account  the  yearly  dividends)  or  such  part  of  the  said 
income  of  these  60  shares  as  may  be  requisite  shall  be  applied 
towards  the  same  object. 

12th.  But  if  it  be  unnecessary  for  said  purpose  so  to  apply 
the  income  of  said  60  Hudson  Bay  shares  (which  must  in  time 
become  more  and  more  valuable  in  proportion  as  the  value  of 
land  increases  in  these  territories  and  which  shall  not  be  sold, 
nor  any  of  my  previously  mentioned  properties  in  Cornwall, 
during  the  lifetime  of  the  Rev.  Arthur  Jarvis  or  that  of  any  of  his 


XXVI.] 


ONTARIO  LAW  REPORTS. 


167 


children  now  living  and  twenty-one  years  after),  then  in  this  c- A- 

case  I hereby  bequeath  these  Hudson  Bay  shares  to  the  University  

of  Bishop’s  College,  Lennoxville,  and  constitute  said  corporation  Mou^AIN 
my  residuary  legatee,  so  far  as  said  shares  are  concerned,  upon 
the  following  trust  and  conditions  that  is  to  say:  To  found  and 
endow  in  said  college  a Mission  Fellowship  whose  Fellow  shall  be 
appointed,  and  his  duties  assigned  as  follows  . . . 

The  stipend  of  the  Mission  Fellow  shall,  to  the  extent  of 
twelve  hundred  dollars  a year,  be  the  first  charge  on  said  Hudson 
Bay  shares.  The  Mission  Fellow  shall  be  called  “The  Jacob 
Mountain  Mission  Fellow  of  Bishop’s  College  Lennoxville.” 

13th.  If  and  as  soon  as  from  the  above  named  and  other 
available  sources  a larger  income  than  two  thousand  dollars 
annually  shall  arise  and  be  derived,  then  I will  devise  and  be- 
queath, in  such  case  and  as  soon  as  practicable,  that  one  hundred 
dollars  or  whatever  portion  of  it  may  be  in  hand  be  paid  yearly 
toward  the  stipend  of  the  Rector  or  Incumbent  of  the  Mountain 
Family  Memorial  Church  of  the  “Good  Shepherd”  East  Corn- 
wall. . . . 

19th.  It  is  my  desire  further  that  as  soon  as  the  obligations 
on  my  personal  and  real  estate  have  been  discharged,  including 
the  payment  of  five  thousand  dollars  to  the  University  at  Windsor, 

N.S.,  for  which  I gave  “my  note  of  hand,”  then  all  my  real  estate 
in  Cornwall,  Ont.,  in  the  Isle  of  Wight,  or,  if  this  should  have  been 
already  sold,  according  to  the  instructions  herein  contained,  the 
proceeds  of  such  sale,  and  the  property  in  the  Winthrop  Highlands 
near  Boston,  Mass.,  U.S.,  shall  be  transferred  to  the  Synod  of 
the  Diocese  of  Ottawa  to  be  held  in  trust  for  the  proposed  new 
Diocese  or  suffragan  Bishop  of  Cornwall,  Ont.,  subject  to  the 
claim  of  residence,  in  one  or  other  of  my  houses,  of  my  dear  wife 
during  the  time  of  her  natural  life. 

Also  it  is  my  desire  that  after  all  existing  claims  on  my  estate 
real  and  personal  as  hereinabove  described  shall  have  been  satisfied 
then  the  accumulation  of  all  rents  shall  be  safely  invested  to  form 
a fund  for  duly  fitting  up  the  house  in  which  Mr.  Poole  now 
lives,  as  a suitable  residence  for  the  future  Bishop  of  Cornwall  . . 

20th.  I have  made  all  the  above  bequests  to  the  suffragan 
bishopric  or  independent  See  of  Cornwall  (which  is  to  be  called 
“The  Mountain  Memorial  Bishopric  of  Cornwall”)  in  the  hope 


168 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1910 

Re 

Mountain. 


that  its  northern  boundary  will  be  the  Ottawa  River  including 
the  Island  of  St.  Pierre  and  all  the  other  islands  between  the 
Cascades  and  the  Island  of  Montreal. 

But  if  the  appointment  and  consecration  of  such  a bishop 
do  not  take  place  within  twenty-five  years  after  my  death,  then 
and  in  such  case  the  properties  which  had  been  intended  for  the 
endowment  of  the  See  of  Cornwall  shall  also  by  transfer  become 
the  property  of  Bishop’s  College  Lennox ville,  subject  to  the 
annual  payment  of  said  one  hundred  dollars  to  the  rector 
or  incumbent  of  said  Church  of  the  “Good  Shepherd”  and  other 
bequests  herein  made  chargeable  on  said  property  and  the  privileges 
herein  conferred  and  in  trust  towards  the  endowment  of  a Pro- 
fessorship of  Natural  Science.  . . . 

[The  testator  then  appointed  executors  and  trustees.] 

The  first  codicil  was  dated  the  6th  April,  1903,  and  contained 
the  following  provisions,  among  others: — 

Owing  to  serious  losses  and  many  expenses  and  disappoint- 
ments since  Bishop  Dunn  of  Quebec  proposed  the  formation  and 
endowment  of  the  Bishop  George  Jehoshaphat  Mountain  Memorial 
Mission  Fund — now  in  process  of  formation,  I am  led  to  reduce, 
as  I hereby  do  reduce,  my  bequest  to  said  fund  to  one  thousand 
five  hundred  dollars,  payable  by  my  executors  as  soon  as  fifteen 
hundred  dollars  shall  have  been  otherwise  contributed  towards 
said  fund,  and  this  within  five  years  after  my  death.  In  default 
of  which  said  sum  being  otherwise  contributed  within  said  time 
said  fund  shall  have  no  claim  on  my  estate.  . . . 

I also  direct  that  the  five  thousand  dollars  referred  to  in  my 
. . will  . . as  set  apart  for  the  benefit  of  the  University 
at  Windsor,  Nova  Scotia,  be  paid  by  my  executors  to  the 
Alumni  Association  of  King’s  College,  to  be  held  by  them  in 
trust  for  said  University,  on  condition,  etc 

The  second  codicil  was  dated  the  7th  August,  1905,  and  was 
as  follows: — 

Know  all  men  by  these  presents  that  I,  Rev.  Canon  Mountain, 
D.C.L.,  D.D.,  and  now  of  Yarbridge,  Brading,  Isle  of  Wight, 
England — do  hereby  assign  and  make  over  to  my  dear  wife — 
Louisa  Mira  the  use  of  my  Bungalow  here  situated,  together  with 
that  of  the  adjoining  cottage  now  occupied  by  Moses  Cooper 
(after  the  time  of  his  decease)  to  have  and  to  hold  the  same  after 


XXVI.] 


ONTARIO  LAW  REPORTS. 


169 


my  death,  and  to  receive  the  rents  therefrom  during  the  period  A. 
of  her  natural  life. 

All  be  it  that  this  codicil,  made  on  the  seventh  day  of  August  , Re 

Mountain, 

1905  (nineteen  hundred  and  five)  and  signed  in  the  presence  of 
two  witnesses  within  said  Bungalow,  does  not  affect  the  terms  and 
conditions  of  my  last  will  and  testament  of  which  a copy  was  left 
with  my  agent  R.  Smith  Esq.  the  lawyer  of  Cornwall,  Ont.  Canada- 

The  deed  of  gift  contained  in  this  codicil  is  free  from  all  mort- 
gage claims  and  legacy  duties. 

The  third  codicil  was  dated  the  29th  May,  1909,  and  was 
unimportant,  except  as  confirming  the  will  and  referring  to  the 
testator’s  property  in  the  Isle  of  Wight  as  his  “temporary 
residence.” 

The  questions  for  determination  submitted  by  the  executors 
were  the  following: — 

1.  What  portion,  if  any,  of  the  estate  of  the  deceased  is  un- 
disposed of  by  the  said  will  and  codicils  thereto,  and  is  to  be  dis- 
tributed according  to  the  Statute  of  Distributions  ? 

2.  What  assets  or  properties  of  the  deceased  the  said  executors 
are  entitled  to  convert  into  cash  for  the  payment  of  the  debts  of 
the  deceased,  and  as  to  the  validity  and  effect  of  the  directions 
and  provisions  made  in  the  said  will  and  codicils  in  restraint  of 
sale  of  the  various  properties  of  the  deceased. 

3.  The  fund  from  which  debts  secured  by  mortgages  on  real 
estate  and  by  transfer  of  bank  stock  are  to  be  paid  off. 

4.  The  fund  or  property  from  which  the  executors  are  to  pay 
off  the  various  general  legacies  contained  in  the  said  will  and 
codicils  and  the  annuities  to  his  widow  and  others. 

5.  How  the  executors  are  to  dispose  of  the  income  and  capital 
of  the  Hudson  Bay  shares  mentioned  in  the  said  will. 

6.  What  obligations  on  personal  and  real  estate  are  referred 
to  in  clause  19  of  the  said  will  and  what  fund  the  $5,000  bequeathed 
to  the  University  at  Windsor,  N.S.,  is  to  be  paid  from. 

7.  When  and  upon  the  fulfillment  of  what  conditions  the  prop- 
erty devised  to  the  Synod  of  the  Diocese  of  Ottawa  is  to  be  trans- 
ferred to  the  said  Synod. 

8.  What  claims  on  real  and  personal  estate  are  referred  to  in 
clause  19  of  the  will,  and  how  and  out  of  what  fund  the  executors 
are  to  satisfy  the  same,  and  what  is  meant  by  the  expression  in 

12 — XXVI.  O.L.R. 


170 


ONTARIO  LAW  REPORTS.  [vol. 


C.  A. 
1910 

Re 

Mountain. 


clause  19  “ accumulation  of  rents,”  and  how  the  same  are  to 
be  applied  by  the  executors. 

9.  What  buildings  or  erections  or  repairs  the  executors  should 
undertake  pursuant  to  clauses  11  and  19  of  the  will  and  the 
codicil  thereto  dated  the  6th  April,  1903. 

10.  What  houses  the  widow  of  the  deceased  is  entitled  to  oc- 
cupy or  receive  the  rents  for. 

11.  The  general  construction  of  the  will  and  codicils  and  the 
advice  of  the  Court  as  to  the  proper  manner  of  dealing  with  and 
distributing  the  estate  of  the  deceased. 


November  9,  1910.  The  motion  was  heard  by  Boyd,  C.,  in 
the  Weekly  Court  at  Toronto. 

R.  Smith , K.C.,  for  the  executors. 

Glyn  Osier,  for  M.  Beatrice  Lloyd  and  Rose  McCaskell,  two 
of  the  next  of  kin  of  the  testator. 

J.  A.  Macintosh,  for  Salter  M.  Dickinson  and  others,  also 
next  of  kin. 

Travers  Lewis,  K.C.,  for  the  Synod  of  the  Diocese  of  Ottawa. 

D.  C.  Ross,  for  Bishop’s  College,  Lennoxville. 


November  14,  1910.  Boyd,  C.: — By  carefully  spelling  out 
this  complicated  will,  it  appears  that  the  testator  provided  for 
the  payment  of  his  obligations  by  a double  process,  and  for  that 
purpose  divided  his  debts  into  two  classes:  (1)  what  he  calls  his 
“just  debts;”  and  (2)  debts  secured  by  him  on  land  or  personalty. 

He  first  provides  for  the  payment  of  his  “just  debts”  and 
funeral  expenses  as  soon  as  possible  after  his  death,  and  then  makes 
the  exception  that  the  payment  of  debts  (a)  secured  on  real  estate 
or  (b)  those  for  which  his  bank  stock  has  been  transferred,  should 
be  postponed  till  they  have  been  paid  off  from  the  income  of  his 
estate. 

The  distinction  is  again  marked  when  he  transfers  all  his 
property  to  his  executors;  this  is  so  transferred  “afterpayment 
of  his  just  debts  and  funeral  expenses,”  to  be  held  by  them  in 
trust.  He  then,  in  the  11th  paragraph,  provides  for  the  transfer 
of  lands  in  trust  to  the  Synod  of  the  Diocese  of  Ottawa;  but 
this  is  to  be  read  in  connection  with  the  19th  paragraph,  by  which 
it  is  provided  that  this  transfer  is  to  be  made  as  soon  as  “the 
obligations  of  my  personal  and  real  estate  have  been  discharged;” 


XXVI.] 


ONTARIO  LAW  REPORTS. 


171 


and,  later  in  the  same  paragraph,  he  says:  “ After  all  existing 
claims  on  my  estate  real  and  personal  as  hereinabove  described 
shall  have  been  satisfied  then  the  accumulation  of  all  rents  shall 
be  safely  invested/ ’ etc. 

All  these  indicate  and  direct  a gathering  in  and  application 
of  income  from  the  whole  estate,  vested  already  in  the  executors, 
in  order  thereout  to  pay  the  secured  debts,  which  are,  therefore, 
not  to  be  paid  in  ordinary  course  out  of  all  available  assets  forth- 
with, but  to  be  paid  from  time  to  time  as  the  income  permits 
till  all  are  finally  satisfied. 

It  is  uncertain  rather  in  what  category  the  obligation  to  Wind- 
sor University  is.  By  the  19th  paragraph  of  the  will,  it  is  classed 
with  “the  obligations  on  his  real  and  personal  estate.”  But 
the  codicil  of  the  6th  April,  1903,  would  rather  go  to  indicate  a 
payment  at  one  time.  No  information  has  been  obtained  from 
the  University  as  to  the  nature  of  the  claim  which  may  exist 
against  the  testator,  and  I can  add  nothing  to  what  I have  said. 
My  judgment  is,  that  the  payment  of  these  secured  claims  is  to 
be  made  out  of  accruing  income  of  the  estate  by  the  executors — 
assuming,  that  is,  that  the  creditors  are  willing  to  wait.  But, 
if  the  claim  is  enforced  by  the  creditors,  I do  not  see  that  the 
next  of  kin  have  any  equity  or  status  to  require  the  executors 
to  postpone  dealing  with  respect  to  the  other  trusts  of  the  estate, 
for  so  long  as  it  might  have  taken  to  accumulate  enough  to  pay 
all  these  secured  claims  in  the  manner  directed  by  the  testator. 
The  legal  rights  of  the  secured  creditors  would  frustrate  the  delay 
contemplated  by  the  testator,  but  cui  bonof  Surely  for  the  ad- 
vantage of  the  beneficiaries  under  the  will.  The  testator’s  object 
in  accumulating  the  rents  is  thereout  to  have  the  creditors  paid; 
but  the  object  of  accumulation  ceases  when  the  creditors  enforce 
payment  out  of  the  general  assets  in  the  usual  course  of  adminis- 
tration. I think  his  intention  is  clear  to  exonerate  the  lands  and 
property  charged  with  debts  from  the  payment  of  the  charges  by 
the  beneficiaries.  The  general  estate  is  to  pay  all  debts  sooner 
or  later. 

As  soon  as  the  obligations  on  the  real  and  personal  estate  are 
satisfied,  then  the  trust  arises  in  respect  of  the  lands.  It  was 
agreed  during  the  argument  that  an  accumulation  of  income 
would  be  required  for  about  five  years  in  order  to  pay  all  these  se- 


ct A. 

1910 

Re 

Mountain. 

Boyd,  C 


172 


ONTARIO  LAW  REPORTS. 


C.  A. 
1910 

Re 

Mountain. 

Boyd,  C. 


[VOL. 

cured  debts  thereout.  The  lands  are  then  to  be  conveyed  to  the 
Synod  of  the  Diocese  of  Ottawa,  to  be  held  in  trust  for  the  endow- 
ment of  a suffragan  bishopric  of  Cornwall.  But,  the  will  pro- 
ceeds, if  the  accomplishment  of  the  said  suffragan  bishopric  is 
long  delayed  ...  if  the  appointment  and  consecration  of 
such  Bishop  do  not  take  place  within  twenty-five  years  after  my 
death,  then  the  properties  intended  for  the  endowment  of  the 
See  of  Cornwall  shall  by  transfer  become  the  property  of  Bishop’s 
College,  Lennoxville. 

The  will  was  made  on  the  25th  June,  1902,  and  the  last  codicil 
confirming  his  will  was  made  on  the  29th  May,  1909,  and  the 
testator  died,  in  the  Isle  of  Wight,  on  the  1st  May,  1910.  The 
appointment  of  any  Bishop  for  a Diocese  of  Cornwall  has  not 
yet  taken  place — though  some  steps  have  been  taken  towards  the 
establishment  of  a coadjutor  bishopric  in  that  locality.  But  the 
matter  has  in  no  sense  reached  that  point  of  completion  required 
by  the  testator.  The  question  is,  whether  the  trust  to  convey 
by  the  executors  of  the  testator  is  to  remain  in  abeyance  for  twenty- 
five  years  from  his  death  or  for  such  lesser  period  as  may  elapse 
before  a coadjutor  or  suffragan  Bishop  has  been  appointed  and 
consecrated  for  the  new  See  of  Cornwall,  or  is  it  a void  bequest 
by  reason  of  infringing  the  rules  against  remoteness?  Even  if 
the  conveyance  to  the  Synod  was  not  to  be  made  till  the  Bishop 
was  appointed,  it  may  be  persuasively  argued  that  the  testator 
was  aware  of  the  condition  of  his  estate,  and  contemplated  that 
some  five  years  would  elapse  from  his  death  before  the  lands  were 
to  be  taken  out  of  the  hands  of  the  executors — they  holding  them 
under  the  trust  to  satisfy,  first,  the  secured  creditors  before  the 
claim  of  the  Synod  arose.  Thus,  in  the  view  of  the  testator,  five 
years  would  be  occupied  in  clearing  the  real  estate,  and  only  an 
interval  of  twenty  years  would  be  the  period  of  suspense  as  to 
whether  or  not  a Bishop  should  be  appointed.  That  length  of 
time  would  not  be  objectionable  in  point  of  remoteness. 


But  I prefer  that  reading  of  the  will  which  would  call  for  the 
conveyance  of  the  lands  to  the  Synod  forthwith  upon  the  satis- 
faction of  the  secured  debts — by  that  body  to  be  held  in  trust 
expectant  upon  the  episcopal  appointment  for  the  period  of 
twenty-five  years  from  the  testator’s  death — with  provision  for 
the  transfer  of  the  lands  by  the  Synod  to  the  Lennoxville  College, 


XXVI.] 


ONTARIO  LAW  REPORTS. 


173 


if  no  Bishop  had  been  duly  appointed  before  the  end  of  the  twenty-  c- A- 
five  years.  

The  language  of  the  testator  permits  of  this  construction,  Mou^AIN 
and  the  Court  will  be  slow  to  seek  to  frustrate  his  general  charitable  

Boyd,  C. 

purpose. 

All  the  real  and  personal  estate  is  vested  in  the  executors  to 
hold  in  trust  ...  for  the  purpose,  as  to  the  lands  mentioned, 
of  being  “ legally  conveyed  to  the  Synod  of  the  Diocese  of  Ottawa 
to  be  held  in  trust  by  said  Synod  for  an  endowment  of  the  bishopric 
of  Cornwall  whenever  the  Bishop  of  Cornwall  is  being  appointed” 

(sic) . 

Again,  in  paragraph  20,  he  adverts  to  this  trust  conferred  by 
the  earlier  clause  on  the  Synod  of  Ottawa,  in  this  way:  “If  the 
appointment  ...  of  such  a Bishop  do  not  take  place  within 
twenty-five  years  after  my  death,  then  and  in  such  case  the  proper- 
ties which  had  been  intended  for  the  endowment  of  the  See  of  Corn- 
wall shall  also  by  transfer  become  the  property  of  Bishop’s  College, 

Lennox ville.”  That  is,  as  I read  it,  the  then  trustees  for  the 
Synod  shall,  at  the  end  of  the  twenty-five  years  (if  no  Bishop  is 
appointed),  transfer  what  they  hold  to  the  trustees  of  the  college 
“in  trust  towards  the  endowment  of  a Professorship  of  Natural 
Science.” 

In  brief,  after  payment  of  the  secured  debts,  the  real  estate 
held  in  trust  is  to  be  conveyed  in  fee  simple  to  the  Synod,  subject 
to  be  divested  if  a Bishop  is  not  appointed  in  twenty-five  years,  in 
favour  of  the  college. 

Here  is  found  an  immediate  gift  for  charitable  uses,  delayed 
as  to  the  actual  conveyance  till  the  secured  debts  are  paid,  and, 
therefore,  vested  at  the  death  and  effective  in  law,  though  the 
particular  application  of  the  gift  may  be  in  suspense  for  twenty- 
five  years  or  may  never  take  effect  at  all — in  which  contingency 
there  is  a valid  transfer  to  another  charity  at  the  end  of  the  twenty- 
five  years.  Chamberlayne  v.  Brockett  (1872),  L.R.  8 Ch.  206, 
lays  down  the  general  principle,  and  there  is  a particular  applica- 
tion of  it  in  In  re  Swain,  [1905]  1 Ch.  669,  which  is  much  in  point 
as  to  the  scheme  of  this  will. 

The  disposition  of  the  lands  to  the  first  charity  (the  Synod) 
being  valid,  the  provision  for  the  transfer  in  certain  events  to  the 
second  charity  (the  college)  is  also  a valid  charitable  bequest: 


174 

C.  A. 
1910 

Re 

Mountain. 
Boyd,  C. 


ONTARIO  LAW  REPORTS.  ' [vol. 

Christ’s  Hospital  v.  Grainger  (1848-9),  16  Sim.  83,  affirmed  1 
Macn.  & G.  460. 

The  testator  had  sixty  Hudson  Bay  shares  of  considerable 
value,  which  are  held  by  the  executors  in  trust  for  the  payment  of 
debts  as  aforesaid.  I have  considerable  doubt  as  to  their  future 
disposal.  They  are  mentioned  specifically  in  connection  with  the 
endowment  of  the  new  bishopric  and  the  lands  intended  therefor. 
The  will  reads  (paragraph  11):  “If  the  yearly  income  . . . 

together  with  any  other  official  income  from  whatever  source,  be 
insufficient  to  produce  a salary  of  $2,000  a year  for  a suffragan 
Bishop  . . . then,  in  such  case,  the  income  of  my  Hudson 

Bay  shares  . . . or  such  part  of  the  said  income  . . . 

as  may  be  requisite  shall  be  applied  towards  the  same  object." 
Paragraph  12:  “But  if  it  be  unnecessary  . . . so  to  apply 

the  income  of  said  60  Hudson  Bay  shares  . . . then  . . . 

I hereby  bequeath  these  . . . shares  to  the  University  of 

Bishop's  College  . . . and  constitute  said  corporation  my 

residuary  legatee,  so  far  as  said  shares  are  concerned,  upon  the 
following  trusts  and  conditions"  ( i.e .,  to  found  a Mission 
Fellowship,  etc.). 

I incline  to  think  that  the  shares,  after  debts  satisfied,  are  to 
be  held  by  the  Synod  of  the  Diocese  to  accumulate  the  income 
for  the  purposes  of  the  expected  endowment  of  the  new  bishopric; 
and,  if  and  when  that  is  established,  within  the  twenty-five  years, 
to  apply  the  accumulated  as  well  as  the  yearly  accruing  income 
in  payment  of  the  salary  named.  If  there  is  a surplus,  or  the 
bishopric  is  not  created  within  the  period,  then  that  surplus  or 
the  shares  themselves  are  to  be  transferred  to  Bishop’s  College. 
That  is  to  say,  the  final  beneficiary  takes  in  subordination  to  the 
prior  beneficiary,  and  only  so  much  as  can  be  called  “residue" 
after  the  just  claims  for  the  endowment  are  satisfied.  This  con- 
struction is  warranted,  I think,  by  the  exceptional  rule  which 
obtains  in  favour  of  charities,  viz.,  that  it  is  preferable  to  give 
effect  to  the  general  intention  of  the  testator,  though  the  detail 
be  incomplete,  than  to  declare  an  intestacy.  The  testator  means 
to  allocate  all  these  Hudson  Bay  shares  (income  and  capital) 
to  one  or  other  of  the  named  charities:  In  re  White,  [1893]  2 Ch.  41. 

The  restraint  upon  the  sale  of  the  Isle  of  Wight  land  till  a tun- 
nel is  made  between  the  Isle  and  the  mainland,  if  such  should  be 


XXVI.] 


ONTARIO  LAW  REPORTS. 


175 


made  within  the  lifetime  of  any  of  the  executors  or  twenty-one 
years  thereafter,  would  appear  to  be  an  illegal  provision  under 
In  re  Rosher  (1884),  26  Ch.D.  801,  followed  and  approved  of  in 
Blackburn  v.  McCollum  (1903),  33  S.C.R.  65. 

These  were  all  the  points  before  me,  and  counsel  agreed  that 
the  disposal  of  these  would  sufficiently  clear  the  way  for  proceeding 
with  the  administration  of  the  estate;  and  I answer  them  as  above 
indicated. 

Costs  out  of  the  estate. 


C.  A. 
1910 

Re 

Mountain. 

Boyd,  C. 


Salter  M.  Dickinson  and  others,  some  of  the  next  of  kin  of 
the  deceased,  appealed  (by  leave)  directly  to  the  Court  of  Appeal 
from  the  judgment  of  Boyd,  C. 


November  22,  1911.  The  appeal  was  heard  by  Moss,  C.J.O., 
Garrow,  Maclaren,  Meredith,  and  Magee,  JJ.A. 

J.  A.  Macintosh , for  the  appellants.  The  learned  Chancellor 
should  have  held  that,  if  the  executors  were  obliged  to  pay  the 
debts,  or  any  of  them,  secured  on  real  or  personal  estate,  otherwise 
than  out  of  income,  then  to  the  extent  that  such  debts  are  paid 
otherwise  than  out  of  income,  the  amount  so  paid  should  be  re- 
stored to  the  estate  out  of  accumulation  of  subsequent  income. 
The  devise  and  bequest  to  the  Synod  of  the  Diocese  of  Ottawa  is 
made  upon  a condition  or  conditions  which  need  not  be  performed 
within  the  limits  allowed  by  the  rule  against  perpetuities,  and  is 
therefore  void:  Cherry  v.  Mott  (1835),  1 My.  & Cr.  123;  Chamber- 
lay  ne  v.  Brockett,  L.R.  8 Ch.  206,  at  p.  212;  In  re  Lord  Stratheden 
and  Campbell,  [1894]  3 Ch.  265;  In  re  Bewick,  [1911]  1 Ch.  116. 
If  the  devise  and  bequest  to  the  Synod  of  the  Diocese  of  Ottawa 
is  void,  the  devise  and  bequest  to  the  University  of  Bishop’s 
College,  Lennoxville,  which  is  dependent  on  the  validity  of  the 
devise  and  bequest  to  the  Synod,  is  also  void,  and  the  property 
covered  by  it  becomes  part  of  the  undisposed  of  estate:  Robinson 
v.  Hardcastle  (1786),  2 Bro.  C.C.  22;  Brudenell  v.  Elwes  (1801), 

1 East  442;  Beard  v.  Westcott  (1813),  5 Taunt.  393;  Monypenny 
v.  Bering  (1852),  2 D.M.&G.  145;  Routledge  v.  Dorril  (1794), 

2 Ves.  Jr.  356. 

Glyn  Osier,  for  M.  Beatrice  Lloyd  and  Rose  McCaskell,  next  of 
kin,  in  the  same  interest  as  the  appellants.  The  learned  Chan- 
cellor’s order  declares  that  in  case  the  executors  are  obliged  to 


176 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1911 

Re 

Mountain. 


pay  any  portion  of  the  secured  debts  before  receiving  sufficient 
income  out  of  which  to  pay  them,  they  are  to  pay  them  out  of  the 
undisposed  of  corpus  of  the  estate,  which  is  not  to  be  replaced 
from  subsequent  income.  This  declaration  is  contrary  to  the 
express  intention  of  the  will,  namely,  that  when  the  time  for  dis- 
tribution of  the  corpus  should  arrive  the  corpus  should  be  intact, 
the  debts  and  charges  having  been  discharged  out  of  income. 
The  testator’s  general  intention  was  to  postpone  payment  of  the 
substantial  legacies  and  bequests  until  the  discharge  of  his  debts 
out  of  income.  If  any  creditors  whose  debts  are  due  refuse  to 
wait,  the  beneficiaries  should  not  thereby  become  entitled  to  re- 
ceive their  legacies  before  the  debts  have  been  paid  or  provided 
for  out  of  income.  In  case  the  executors  are  required  to  pay 
debts  of  an  amount  exceeding  the  income  in  hand,  at  the  time 
payment  is  demanded,  their  duty  is  either  to  raise  the  necessary 
fund  by  charging  upon  the  estate  or  to  replace  the  corpus  tem- 
porarily used  to  discharge  the  debts.  If  subsequent  income  can- 
not be  used  to  replace  moneys  provided  to  meet  a deficiency,  then, 
the  fund  indicated  for  payment  having  partly  failed,  the  devisee 
must  take  the  real  estate  subject  to  the  unpaid  portion  of  the  charg- 
es and  incumbrances  against  it:  Wills  Act,  R.S.O.  1897,  ch.  128, 
sec.  37;  Rodhouse  v.  Mold  (1866),  35  L.J.  Ch.  67.  I adopt  the 
argument  of  counsel  for  the  appellants  that  the  devises  and  be- 
quests to  the  Synod  and  to  Bishop’s  College  are  void  under  the 
rule  against  perpetuities  under  the  authorities  cited  by  him. 

Travers  Lewis,  K.C.,  and  J . W.  Bain,  K.C.,  for  the  Synod  of 
the  Diocese  of  Ottawa.  The  gift  to  the  Synod  is  a vested  gift, 
to  which  the  rule  against  perpetuities  cannot  be  applied:  Chamber- 
lay  ne  v.  Brockett,  L.R.  8 Ch.  206,  at  p.  210;  In  re  Swain,  [1905] 
1 Ch.  669.  The  gift  being  to  a charity,  the  gift  over  is  also  good, 
as  the  rule  is  not  applied  to  such  a case:  Christ’s  Hospital  v. 
Grainger,  16  Sim.  83,  1 Macn.  & G.  460;  Wallis  v.  Solicitor-General 
for  New  Zealand,  [1903]  A.C.  173,  at  p.  186;  Theobald  on  Wills, 
7th  ed.,  p.  367;  Re  Gyde  (1898),  79  L.T.R.  261;  Attorney- 
General  v.  Bishop  of  Chester  (1785),  1 Bro.  C.C.  444.  In 
case  the  executors  are  obliged  to  pay  any  of  the  secured  debts 
before  sufficient  income  shall  be  received  by  them,  they  are  en- 
titled to  pay  the  same  out  of  the  undisposed  of  corpus  of  the 
estate,  and  in  such  event  the  portion  of  the  corpus  so  expended 


XXVI.] 


ONTARIO  LAW  REPORTS. 


177 


is  not  to  be  replaced  from  subsequent  income : Metcalfe  v.  Hutchin - c-  A- 

son  (1875),  1 Ch.D.  591,  at  p.  594;  Theobald  on.  Wills,  7th  ed., 
pp.  834  and  836;  Adamson  v.  Armitage  (1815),  19  Ves.  416;  Page  Mou^® 
v.  Leapingwell  (1812),  18  Yes.  463;  Haig  v.  Swiney  (1823),  1 Sim. 

& Stu.  487;  In  re  L’Herminier,  [1894]  1 Ch.  675;  Wharton  v. 
Masterman,  [1895]  A.C.  186;  Mannox  v.  Greener  (1872),  L.R.  14 
Eq.  456,  462;  Morrow  v.  Jenkins  (1884),  6 O.R.  693.  The  re- 
straint upon  the  sale  of  the  property  in  the  Isle  of  Wight  and  of 
the  properties  in  Cornwall  and  the  Hudson  Bay  shares  is  an 
illegal  restraint:  Blackburn  v.  McCollum,  33  S.C.R.  65.  The 
widow  is  not  entitled  to  the  use  of  the  testator’s  house  in 
Cornwall  if  she  accepts  the  devise  to  her  of  the  testator’s  bungalow 
in  the  Isle  of  Wight  and  the  cottage  adjoining  it.  The  Synod 
should  be  paid  their  costs  as  between  solicitor  and  client:  Re 
Fleming  (1886),  11  P.R.  272,  285,  and  cases  there  cited. 

D.  C.  Ross,  for  Bishop’s  College,  Lennoxville.  The  Hudson 
Bay  shares  should  be  transferred  to  the  college  after  payment  of 
the  debts  and  charges  mentioned  in  the  third  paragraph  of  the 
judgment,  or  be  held  in  trust  by  the  trustees  of  the  will  and  the 
income  paid  to  the  college  until  such  time  as  the  suffragan  Bishop 
of  Cornwall  is  appointed,  and  it  is  ascertained  that  his  salary 
requires  to  be  augmented  from  the  income  of  these  shares.  If  the 
devise  and  bequest  to  the  Synod  of  the  Diocese  of  Ottawa  be  held 
void  for  remoteness,  the  same  became  vested  in  or  was  transferred 
to  the  college,  which  is  a charity  in  esse ; or,  there  being  a general 
charitable  intention,  on  failure  of  one  mode,  the  other  indicated 
should  take  effect  in  favour  of  the  College.  See  Taylor’s  Equity, 
pp.  176,  177;  Going  v.  Hanlon  (1869),  4 Ir.  R.C.L.  144. 

R.  Smith,  K.C.,  for  the  executors,  submitted  his  clients’  rights 
to  the  Court. 

Macintosh,  in  reply.  In  the  Christ’s  Hospital  case,  cited  by 
the  respondents,  the  first  bequest  was  a valid  one.  But  I deny 
that  if  the  devise  to  the  first  charity  is  invalid,  and  the  second 
offends  against  perpetuities,  it  is  valid  because  it  follows  another. 

See  In  re  Bowen,  [1893]  2 Ch.  491;  Theobald  on  Wills,  7th  ed., 
p.  373.  On  the  question  of  the  validity  of  the  gift,  see  Worthing 
Corporation  v.  Heather,  [1906]  2 Ch.  532,  at  p.  538. 

April  15.  Moss,  C. J.O. : — This  is  an  appeal  by  certain  of  the 
next  of  kin  of  the  testator,  the  Rev.  Jacob  Jehoshaphat  Salter 


178 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Re 

Mountain. 

Moss,  C.J.O. 


Mountain,  D.D.,  from  the  judgment  pronounced  by  the  Chancellor 
of  Ontario  upon  two  of  several  questions  raised  by  the  executors 
and  executrix  of  the  will  under  Con.  Rule  938,  as  enacted  by 
Con.  Rule  1269.  The  questions  were:  whether,  if  the  executors 
were  obliged  to  pay  debts  or  any  part  of  debts  secured  on  the 
testator’s  real  or  personal  estate  otherwise  than  out  of  income, 
the  amount  so  paid  should  be  restored  to  the  estate  out  of  subse- 
quently accumulated  income;  and  whether  or  not  the  devise  and 
bequest  contained  in  the  will  to  the  Synod  of  the  Diocese  of  Ot- 
tawa is  void  as  offending  the  rule  against  perpetuities. 

The  learned  Chancellor  determined  both  these  questions  ad- 
versely to  the  contention  of  the  appellants,  who  are  supported  in 
the  appeal  by  others  in  the  same  interest.  Other  questions  were 
discussed  by  counsel  for  the  Synod  of  the  Diocese  of  Ottawa 
during  the  argument;  but,  if  they  are  at  all  proper  to  be  disposed 
of  upon  a proceeding  of  this  kind,  they  seem  not  to  be  ripe  for 
determination  at  present. 


The  main  question  is,  of  course,  whether  the  devises  and  be- 
quests to  the  Synod  are  void  under  the  rule  against  perpetuities. 

The  will,  which,  with  three  codicils,  deals  with  and  purports 
fully  to  dispose  of  the  testator’s  estate,  is  a very  long  and  intricate 
instrument,  containing  many  complicated  and  involved  provisions 
and  directions,  due  to  some  extent,  no  doubt,  to  the  testator’s 
evident  fondness  for  and  tendency  to  minute  detail  and  his  desire 
to  leave  nothing  unprovided  for  in  the  final  disposition  of  his 
estate.  And  it  is  apparent  that  he  must  have  felt  satisfied  that 
he  had  effectively  disposed  of  all  he  possessed,  for  there  is  no 
residuary  clause. 

His  whole  estate,  real  and  personal,  is  said  to  be  of  the  value 
of  about  $99,000.  There  were  debts  which  he  appears  to  have 
divided  into  two  classes,  and  which  it  was  his  desire  should  be 
treated  differently  or  at  least  regarded  in  a different  way  by  his 
executors  in  the  administration  of  his  estate : (a)  ordinary  current 
debts,  which  he  calls  his  “just  debts;”  and  (b)  debts  secured  by 
him  on  lands  or  personalty,  among  which  he  seems  to  have  in- 
cluded a liability  of  $5,000  to  the  University  at  Windsor,  Nova 
Scotia,  for  which,  he  says,  he  gave  his  “note  of  hand.”  , 

He  desired  the  first  class,  together  with  his  funeral  expenses, 
to  be  paid  as  soon  after  his  death  as  possible.  His  intention  with 


XXVI.] 


ONTARIO  LAW  REPORTS. 


179 


regard  to  the  other  class  was  to  postpone  payment  so  far  as  to 
enable  them  to  be  paid  off  from  the  income  of  his  estate.  He 
could  not,  of  course,  control  the  action  of  the  creditors,  in  case 
they  were  not  willing  to  wait  after  their  claims  became  payable. 
Beyond  this,  he  gives  no  specific  directions  to  his  executors  with 
regard  to  the  payment  of  these  debts,  except  what  is  to  be  gathered 
by  inference  from  the  19th  paragraph  of  the  will,  and  the  direction 
in  the  first  codicil  as  to  the  payment  by  the  executors  of  the  $5,000 
to  the  Alumni  Association  of  King’s  College,  instead  of  directly 
to  the  University  of  Windsor.  This  latter  direction  is  quite 
consistent  with  the  payment  of  the  amount  in  one  sum  out  of  the 
general  estate,  instead  of  out  of  income.  By  the  11th  paragraph 
of  the  will,  the.  testator  gives  directions  for  the  conveyance  of  the 
properties  there  mentioned,  and  the  proceeds  of  any  that  may 
have  been  sold,  to  the  Synod  of  the  Diocese  of  Ottawa,  to  be  held 
by  it  in  trust  for  the  endowment  of  the  bishopric  of  Cornwall, 
only  delayed,  if  at  all,  by  virtue  of  what  is  provided  in  the  19th 
paragraph  of  the  will.  But  I do  not  think  that  these  provisions 
were  intended  to  affect  or  do  affect  the  vesting  in  the  Synod  of 
Ottawa  of  an  immediate  estate  or  interest  for  the  purposes 
designated  in  the  11th  paragraph.  The  two  paragraphs  must 
be  read  together,  and,  so  read,  they  are  found  to  contain,  as  the 
learned  Chancellor  expresses  it,  “an  immediate  gift  for  charitable 
uses,  delayed  as  to  the  actual  conveyance  till  the  secured  debts 
are  paid,  and,  therefore,  vested  at  his  (the  testator’s)  death.” 

Here  the  gift  to  the  Synod  for  the  charitable  purposes  ex- 
pressed is  not  conditional  upon  the  payment  of  the  debts  out  of 
the  income.  The  gift  takes  immediate  effect,  whichever  way 
the  debts  may  be  paid.  In  the  recent  case  of  In  re  Bewick,  [1911] 
1 Ch.  116,  much  relied  upon  by  the  appellants,  there  was  no  gift 
to  the  children  living  and  the  issue  of  any  that  might  have  died  nor 
any  vesting  in  them  of  any  beneficial  interest  until  all  the  testator’s 
real  estate  should  be  clear  of  all  charges  thereon — a wholly  un- 
certain event  which  might  operate  to  postpone  the  period  of  vesting 
beyond  that  prescribed  by  the  rule  against  perpetuities.  I agree 
with  the  construction  which  the  learned  Chancellor  has  placed 
upon  this  will  as  regards  this  branch  of  the  case. 

As  to  the  application  of  income  to  the  exoneration  of  the 
general  estate,  to  the  extent,  if  any,  to  which  it  may  be  called  upon 


C.  A. 
1912 

Re 

Mountain. 

Moss,  C.J.O. 


180 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Re 

Mountain. 

Moss,  C.J.O. 


[VOL. 

to  answer  the  secured  debts,  I am,  with  deference,  unable  to  per- 
ceive any  reason  why  that  should  not  be  the  case.  It  is  very 
apparent  that,  while  the  testator  was  anxious,  if  possible,  to  free 
the  incumbered  estates  by  the  application  of  income,  he  had  no 
intention  that  they  should  be  freed  at  the  expense  of  the  general 
estate;  and  I think  the  judgment  should  be  varied  in  this  respect. 

We  were  asked  by  counsel  for  the  Synod  to  pronounce  upon  a 
number  of  other  points.  One  was  with  regard  to  a further  declara- 
tion as  to  conditions  which  he  submitted  were  in  restraint  of  sale 
of  the  testator’s  Cornwall  property  and  Hudson  Bay  shares 
This  may  or  may  not  depend  upon  circumstances,  and  could 
properly  arise  only  in  administration  proceedings.  So  with 
regard  to  the  alleged  obligation  of  the  testator’s  widow  to  elect 
between  the  gifts  to  her  of  a life  estate  in  the  testator’s  Cornwall 
house  and  one  in  the  Isle  of  Wight.  The  facts  are  not  sufficiently 
developed  to  enable  any  proper  conclusion  to  be  arrived  at  on  this 
question.  Then,  as  to  the  claim  that  the  Synod  should  be  paid 
its  costs  as  between  solicitor  and  client,  the  rule  does  not  extend 
in  general  beyond  the  applying  trustee  or  executor,  and  we  could 
not  interfere  with  the  order  as  it  now  stands  in  this  respect. 

Except  as  indicated,  I would  affirm  the  judgment  appealed 
from,  the  directions  of  which  appear  quite  sufficient  to  enable  all 
the  matters  dealt  with  by  the  learned  Chancellor  to  be  properly 
worked  out. 

As  to  costs,  the  appellants  have  failed  as  to  the  substantial 
part  of  their  appeal,  and  should  pay  the  costs  of  the  respondents 
who  are  adverse  in  interest  to  them.  The  executors’  costs,  as 
between  solicitor  and  client,  may  be  paid  out  of  the  estate. 

Meredith,  J.A. : — This  matter  seems  to  me  to  be  within 
quite  a narrow  compass ; and  easy  to  be  determined  if  approached 
in  the  right  way. 

Our  duty  is  not  to  endeavour  to  wreck  this  will  upon  the 
shoals  of  technicality,  or  upon  any  rock  of  inexorable  rule  of  law, 
but  rather  to  guide  it  through  such  obstacles,  and  to  give  effect 
to  the  testator’s  intentions,  expressed  in  it,  if,  by  any  lawful 
means,  that  can  be  done,  and,  for  that  purpose,  to  take  a compre- 
hensive view  of  the  will,  not  to  search  for,  and  stumble  at,  minute 
seeming  contradictions  or  uncertainties;  and  that  duty  can,  I 
think,  be  accomplished  without  any  sort  of  serious  difficulty. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


181 


I am  unable  to  perceive  any  substantial  reason  why  the 
gift  to  the  Synod  may  not  be  considered  a vested  gift,  to  which 
the  rule  against  perpetuities  cannot  be  applied;  and  once  vested 
the  estate  may  last  indefinitely  without  offending  the  rule;  and, 
the  gift  being  a gift  to  a charity,  and  the  gift  over  to  another 
charity,  the  gift  over  is  also  good,  as  the  rule  is  not  applied  to  such 
a case:  see  In  re  Tyler , [1891]  3 Ch.  252.  In  this  respect  this 
matter  comes  within  the  authority  of  Chamberlayne  v.  Brockett, 
L.R.  8 Ch.  206,  and  not  within  that  of  In  re  Lord  Stratheden  and 
Campbell,  [1894]  3 Ch.  265,  in  which  the  gift  was  made  upon  a con- 
dition that  might  never  happen;  in  this  case  the  gift  was  vested, 
but  to  be  divested  in  a certain  event.  The  intention  was  not  to 
give  only  in  the  event  of  the  creation  of  the  new  see;  that  would 
be  to  frustrate,  rather  than  to  further,  the  testator’s  object,  an 
object  which  was  dear  to  his  heart.  He  knew  that  that  could 
hardly  be  accomplished  without  the  means  which  he  was  provid- 
ing, and  possibly  might  not  be,  even  with  them;  and  so  the  means 
were  given  presently,  but  to  be  withdrawn  if  the  bishopric  were 
not  an  accomplished  fact  within  the  twenty-five  years.  The 
parenthetical  restriction,  contained  in  the  12th  item  of  the  will, 
may,  I think,  be  considered  an  attempt  to  restrain  alienation; 
whether  valid  or  not  is  immaterial  upon  this  the  main  question 
in  the  case. 

The  pro  vision  % for  the  payment  of  debts  out  of  the  income 
does  not  aid  the  appellants  in  this  respect,  nor  would  it,  if  it  de- 
layed the  beneficiaries  having  the  benefit  of,,  the  gifts  to  them, 
beyond  the  perpetuities’  period;  for  a trustee  in  such  a case  holds 
in  trust  for  the  beneficiary,  subject  to  the  payment  of  the  debts: 
Bacon  v.  Proctor  (1822),  T.  & R.  31. 

If  creditors  will  not  wait,  or  if  the  beneficiaries  are  willing 
to  pay  off  all  charges  against  their  properties,  I cannot  understand 
why  the  simple  method  adopted  in  the  case  of  Bacon  v.  Proctor 
should  not  be  followed;  or,  in  any  case,  why  the  money  to  pay  off 
pressing  creditors  may  not  be  raised  upon  the  estate  in  such  a 
manner  as  will  put  the  new  creditors  in  precisely  the  same  position 
as  the  old  creditors,  and  so  leave  this  matter,  substantially,  pre- 
cisely as  the  testator  left  it  by  his  will:  and,  I think,  this  should 
be  done.  But,  whatever  course  may  be  adopted,  the  burden 


C.  A. 
1912 

Re 

Mountain. 

Meredith,  J.A. 


182 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Re 

Mountain. 

Meredith,  J.A. 


[VOL. 

ought  to  be  made  to  fall,  in  all  respects,  just  as  it  would  under 
the  will,  if  possible,  and,  if  not  possible  in  all  respects,  then  as  nearly 
so  as  possible. 

Questions  of  restraint  on  alienation  do  not  seem  to  me  to  be 
proper  subjects  of  an  application  such  as  this.  An  expression 
of  opinion  upon  such  an  application  would  be  of  no  useful  binding 
effect;  upon  proceedings  between  vendor  and  purchaser  such  a 
question  would  properly  arise  and  a judicial  opinion  be  effectual. 
An  opinion  now  expressed  would  be  especially  out  of  place,  in  my 
opinion,  in  regard  to  the  land  in  the  Isle  of  Wight:  I,  therefore, 
refrain  from  expressing  any  opinion  upon  these  questions. 

The  question  whether  the  widow  is  entitled  to  Pinehurst 
House,  as  well  as  to  the  Bungalow,  depends  entirely  upon  the 
question  of  fact,  whether,  at  the  time  of  the  testator’s  death, 
Pinehurst  House  was  his  and  was  also  the  home  of  his  wife  and 
himself.  Each  gift  is  for  life;  there  is  no  restriction  upon  that  of 
the  Bungalow,  but  in  regard  to  Pinehurst  House  his  will  is:  “She 
is  also  to  have  the  use,  rent  free,  during  the  time  of  her  natural 
life,  of  this  ‘ Pinehurst  House/  furnished,  or  of  whichever  house  of 
mine  may  be  our  home  at  time  of  my  decease.”  So  that, 
though  the  widow  certainly  takes  the  Bungalow,  she  loses  Pine- 
hurst House  if  at  the  time  of  the  testator’s  death  the  Bungalow 
were  “our  home,”  for  it  was  unquestionably  a “house  of  mine.” 
In  the  codicil  of  the  29th  May,  1909,  the  last  codicil,  the  testator 
refers  to  his  property  in  the  Isle  of  Wight  as  his  “temporary 
residence.” 

There  is  no  sufficient  ground  upon  which  the  disposition  of 
the  costs  of  the  application  can  be  disturbed;  but  the  appellants 
ought  to  pay  the  general  costs  of  this  appeal,  the  substantial 
question  being  the  validity  of  the  gifts  to  the  charities. 

G arrow,  M acl aren,  and  Magee,  JJ.A.,  concurred. 


Judgment  below  varied. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


183 


[IN  THE  COURT  OF  APPEAL.] 

Merchants  Bank  of  Canada  v.  Thompson. 

Promissory  Note — Indorsement  to  Bank  by  Customer  before  Maturity — 
Purpose  of — Collection  or  Collateral  Security — Lien  of  Bank  for 
Amount  Oioing  by  Customer — Fresh  Indebtedness  when  Note  Overdue 
— Failure  of  Consideration  between  Original  Parties — Purchase  of 
Share  in  Partnership — Part  Failure  of  Consideration. 

The  judgment  of  a Divisional  Court,  23  O.L.R.  502,  was  reversed  and  the 
judgment  of  Boyd,  C.  restored;  Maglaren,  J.A.,  dissenting. 

Per  Moss,  C.J.O. : — Even  if  the  promissory  note  sued  on  was  indorsed  to 
the  plaintiffs  merely  for  collection,  and  not  as  collateral  security,  the 
plaintiffs  were  still  entitled  to  the  judgment  awarded  to  them  by  Boyd, 
C.  As  indorsees  for  collection,  they  were  entitled  to  a lien  on  the 
note  for  debts  that  were  then  presently  payable  and  from  time  to  time 
thereafter  becoming  payable.  When  the  note  was  received  by  the 
plaintiffs,  it  was  a note  for  good  consideration,  not  overdue.  The  de- 
fendants became  parties  to  the  note  as  sureties  for  L.  upon  a trans- 
action between  him  and  F.  for  the  acquisition  by  L.  of  a half  share  in 
the  business  of  F.  and  the  formation  of  a partnership  between  them. 
The  partnership  was  in  fact  created;  and  its  subsequent  termination 
would  not  bring  about  a total  failure  of  consideration  so  as  to  affect 
the  validity  of  the  note  in  the  hands  of  either  F.  or  the  plaintiffs. 
Upon  taking  the  partnership  accounts,  L.  might  be  able  to  shew  himself 
entitled  to  a return  of  part  of  the  premium;  but  it  was  for  the  defend- 
ants to  shew  this,  if  they  wished  to  avail  themselves  of  the  defence 
of  part  failure  of  consideration;  and  they  had  not  shewn  it. 

Per  Meredith,  J.A. : — The  proper  conclusion  upon  the  facts  is,  that  the 
note  was  taken  and  always  held  by  the  plaintiffs  as  security  for  the  re- 
payment of  all  that  might  from  time  to  time  be  owing  by  F.  to  the 
plaintiffs.  And,  that  being  so,  the  note  was  good,  in  the<  plaintiffs’ 
hands,  against  the  makers  of  it,  for  the  amount  of  the  indebtedness  of 
F.  to  the  plaintiffs;  the  fact  that  at  some  times  there  was  nothing 
due  from  F.  to  the  plaintiffs  would  not  cut  out  that  right  or  deprive 
the  plaintiffs  of  the  position  of  a holder  in  due  course;  there  would 
not  be  by  implication  a new  transfer  of  the  note  as  security  for  each 
separate  indebtedness  or  advance;  there  would  be  but  the  one  trans- 
action, to  which  all  changes  in  the  account  between  F.  and  the  plain- 
tiffs would  be  referable;  everything  would  relate  back  to  the  one  transfer 
made  while  the  note  was  current;  although  it  was  competent  for  F. 
to  take  up  the  note  at  any  time  when  there  was  no  obligation  on  his 
part  to  the  plaintiffs. 

Atwood  v.  Crowdie  (1816),  1 Stark.  483,  followed. 

Per  Maclaren,  J.A. : — The  note  was  left  with  the  plaintiffs  “for  what  it 
was  worth,”  without  any  special  pledging  or  hypothecation;  and  the 
right  which  the  plaintiffs  had  under  their  banker’s  lien  was  the  right 
to  retain  the  note  for  any  debt  due  to  them;  they  had  no  right  to 
retain  it  for  any  liability  not  yet  due  or  payable.  The  legal  position  of 
the  plaintiffs  was  the  same  as  though  they  had  returned  the  note  to 
F.  when  there  was  nothing  owing  by  him,  and  he  had  redelivered  it  to 
them  when  he  again  became  indebted  to  them,  it  being  then  overdue, 
and  so  taken  subject  to  all  the  equities  between  the  makers  and  F. ; 
and  there  was  such  a failure  of  consideration  as  between  F.  and  L.  as 
would  prevent  the  plaintiffs  from  recovering. 

Atwood  v.  Crowdie,  supra,  explained. 

An  appeal  by  the  plaintiffs  from  the  judgment  of  a Divisional 
Court,  23  O.L.R.  502. 


C.  A. 
1912 

April  15 


184 

C.  A. 
1912 

Merchants 
Bank  of 
Canada 

v. 

Thompson. 


ONTARIO  LAW  REPORTS.  [vol. 

January  16  and  17.  The  appeal  was  heard  by  Moss,  C.J.O., 
Garrow,  Maclaren,  Meredith,  and  Magee,  JJ.A. 

J.  F.  Orde,  K.C.,  for  the  plaintiffs.  There^was  not  a total 
failure  of  consideration.  Living  got  what  he  agreed  to  pay’ for: 
Lindley  on  Partnership,  7th  ed.,  p.  626.  The  failure  of  con- 
sideration (if  any)  was  at  most  but  partial,  entitling  Living  to 
a partial  return  of  his  premium:  Chalmers  on  Bills  of  Exchange, 
7th  ed.,  p.  108;  Kilroy  v.  Simkins  (1876),  26  C.P.  281.  The 
note  was,  prior  to  its  maturity,  pledged  to  the  bank  as  collateral 
security  for  advances  theretofore  made  and  thereafter  to  be 
made  to  Fox.  Consequently,  notwithstanding  that  the  loans  to 
Fox  were  from  time  to  time  paid  off,  the  plaintiff  s’  right  to  the 
security  would  attach  from  the  date  of  the  pledge,  September, 
1907;  Atwood  v.  Crowdie  (1816),  1 Stark.  483.  But  the  plaintiffs’ 
right  to  recover  does  not  depend  upon  an  express  pledging  of 
the  note.  The  plaintiffs,  in  any  event,  held  the  note  for  collec- 
tion, and  were  consequently  entitled  to  exercise  their  banker’s 
lien,  which  has  the  effect  of  creating  a pledge  without  any  con- 
scious pledging:  Paget  on  Banking,  2nd  ed.,  pp.  297,  298;  Grant 
on  Banking,  6th  ed.,  pp.  301  and  305;  Hart  on  Banking,  2nd  ed., 
p.  744;  Brandao  v.  Barnett  (1846),  12  Cl.  & F.  787;  and  by 
virtue  of  their  lien  they  became  holders  for  value  and  are  en- 
titled to  recover  to  the  extent  of  the  lien:  Bills  of  Exchange 
Act,  sec.  54;  Maclaren  on  Bills,  4th  ed.,  pp.  174,  175;  Falcon- 
bridge  on  Banking,  pp.  449  et  seq.;  Chalmers  on  Bills  of  Exchange, 
7th  ed.,  pp.  93  et  seq.  No  state  of  facts  has  been  shewn  by  the 
defendants  which  constituted  an  “ equity  attaching  to  the  note” 
or  rendered  Fox’s  title  defective  within  the  meaning  of  sec.  70 
of  the  Bills  of  Exchange  Act:  Oulds  v.  Harrison  (1854),  10  Ex. 
572;  In  re  Overend  Gurney  <&  Co.,  Ex  p.  Swan  (1868),  L.R.  6 
Eq.  344.  The  cases  of  Holmes  v.  Kidd  (1858),  3 H.  & N.  891, 
and  Ching  v.  Jeffery  (1885),  12  A.R.  432,  are  clearly  distinguish- 
able from  the  present  case.  What  took  place  in  both  these  cases 
amounted  in  effect  to  payment  or  part  payment,  and  the  amount 
was  in  each  case  liquidated  and  ascertained.  The  appellants  also 
rely  upon  the  reasons  given  by  the  Chancellor  and  Mr.  Justice 
Britton. 

Travers  Lewis,  K.C.,  and  J.  W.  Bain,  K.C.,  for  the  defen- 
dants. The  note  represented  the  purchase-price  of  a half  share 


XXVI.] 


ONTARIO  LAW  REPORTS. 


185 


in  Fox’s  manufacturing  agencies,  which  half  share  Living  never 
got;  and,  consequently,  the  consideration  for  the  note  wholly 
failed.  Section  54  of  the  Bills  of  Exchange  Act,  relied  upon  by 
the  learned  trial  Judge,  we  submit,  does  not  extend  to  the  case 
of  a dishonoured  note:  Hart  on  Banking,  2nd  ed.,  p.  480;  Giles 
v.  Perkins  (1807),  9 East  12;  Thompson  v.  Giles  (1824),  2 B. 
& C.  422;  Dawson  v.  Isle , [1906]  1 Ch.  633,  637.  The  evidence 
shews  that  the  note  was  deposited  for  collection  only.  There 
is  no  doubt  that  the  defendants  were  sureties;  and  the  bank 
manager,  after  the  note  matured,  must  have  known  that  such 
was  the  case.  The  note  was  repledged  after  maturity,  and  the 
bank  had  no  property  in  it,  but  only  a lien  at  most,  under  sec.  54 
of  the  Bills  of  Exchange  Act.  As  soon  as  the  indebtedness  of 
Fox  was  wiped  out,  the  lien  was  discharged;  and,  when  a new 
lien  accrued,  it  would  be  subject  to  the  intervening  equities: 
Chalmers  on  Bills  of  Exchange,  6th  ed.,  p.  120.  Sections  54  and 
70  of  the  Bills  of  Exchange  Act  ought  not  to  be  read  together : 
Falconbridge  on  Banking  and  Bills  of  Exchange,  pp.  477,  478; 
Ching  v.  Jeffery,  12  A.R.  432,  especially  at  pp.  434,  436;  Polak 
v.  Everett  (1876),  1 Q.B.D.  669,  per  Blackburn,  J.,  at  p.  674; 
Britton  v.  Fisher  (1867),  26  U.C.R.  338,  at  pp.  339,  340.  The 
evidence  shews  that  there  was  a binding  agreement  by  Fox  to 
give  time  to  Living;  and  the  learned  trial  Judge  erred,  we  sub- 
mit, in  thinking  that  there  was  no  sufficient  variation  to  alter 
the  position  of  the  parties:  Canada  Permanent  Loan  and  Savings 
Co.  v.  Ball  (1899),  30  O.R.  557,  and  particularly  at  pp.  568,  572, 
573,  and  the  authorities  there  collected;  Bonar  v.  Macdonald 
(1850),  3 H.L.C.  226,  238.  Making  an  agreement  with  the 
principal  debtor  for  8 per  cent,  interest  on  the  overdue  note 
is  a giving  of  time  sufficient  to  discharge  the  sureties:  Blake  v. 
White  (1835),  1 Y.  & C.  (Ex.)  420,  426;  DeColyar  on  Guarantees, 
3rd  ed.,  pp.  422,  424;  Brandt  on  Suretyship  (1905),  vol.  1,  secs. 
389,  394;  Lime  Rock  Bank  v.  Mallett  (1856),  42  Me.  349,  358; 
Rowlatt  on  Suretyship  (1899),  p.  245.  On  the  point  of  banker’s 
lien,  see  Lloyd  v.  Davis  (1824),  3 L.J.O.S.K.B.  38;  Falconbridge 
on  Banking,  p.  460,  and  cases  there  cited.  The  respondents  also 
rely  on  the  reasons  given  by  the  Chief  Justice  of  the  King’s  Bench. 

Orde,  in  reply. 

April  15.  Moss,  C.J.O.: — This  is  an  appeal  by  the  plaintiffs 


C.  A 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson. 


13 — XXVI.  O.L.R. 


186 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson. 
Moss,  C.J.O. 


[VOL. 

from  a judgment  of  a Divisional  Court  reversing  (Britton,  J., 
dissenting)  a judgment  of  the  Chancellor  of  Ontario  at  the  trial 
without  a jury. 

The  case  is  reported  in  23  O.L.R.  502,  where  the  facts  are 
fully  stated  in  the  judgment  of  the  Chief  Justice  of  the  King’s 
Bench. 

The  plaintiffs  sue  as  the  holders  of  a promissory  note  for 
$2,000  made  by  one  A.  H.  Living  and  the  defendants  in  favour 
of  one  C.  H.  Fox,  and  by  him  indorsed  to  the  plaintiffs’  order. 
The  note  is  in  form  joint  and  several.  The  action  was  brought 
against  the  two  defendants  alone,  and  no  steps  were  taken  by 
them  to  bring  or  cause  the  plaintiffs  to  bring  Living  and  Fox 
into  the  action. 

They  were,  of  course,  not  bound  to  do  so  unless  they  con- 
sidered it  material  to  their  defence;  but,  in  one  aspect  of  the 
case,  it  might  have  been  to  their  advantage  to  have  had  them 
before  the  Court. 

The  defences  relied  upon,  as  shewn  by  the  record  upon  which 
the  parties  went  to  trial,  as  well  as  those  afterwards  permitted 
to  be  set  up,  are  set  forth  on  p.  508  of  the  report. 

As  regards  the  answers  to  the  action  alleged  in  the  first  para- 
graph of  the  original  defence  and  repeated  in  substance  in  two 
paragraphs  of  the  further  defences,  viz.,  an  agreement  for  exten- 
sion of  time  and  neglect  to  give  notice  of  dishonour  to  the  de- 
fendants, there  is  no  difference  of  opinion  between  the  trial  Judge 
and  the  Divisional  Court.  These  defences  failed  for  lack  of 
proof  that  the  plaintiffs  had  notice  that  the  defendants  were 
' sureties  for  Living. 

The  other  defences,  viz.,  that  the  note  was  made  without 
consideration  and  was  indorsed  to  the  plaintiffs  without  con- 
sideration and  after  maturity;  that  the  consideration  for  the 
note  as  between  Fox  and  Living  failed,  and  that  at  the  time  of 
the  commencement  of  the  action  the  plaintiffs’  title  was  no  higher 
than  Fox’s,  and  the  note  was  held  subject  to  the  existing  equities 
between  him  and  Living,  are  those  upon  which  the  differences 
of  opinion  have  arisen.  It  is  now  beyond  question,  upon  the 
evidence,  that  the  defendants  became  parties  to  the  note  as 
sureties  for  Living  upon  a transaction  between  him  and  Fox 
for  the  acquisition  by  the  former  of  a half  share  or  interest  in 


XXVI.] 


ONTARIO  LAW  REPORTS. 


187 


the  business  of  manufacturers’  agent  carried  on  by  Fox  in  the 
city  of  Vancouver,  and  the  formation  of  a partnership  between 
them  in  the  business.  The  nature  of  the  transaction  is  to  be 
gathered  from  the  evidence  of  these  parties  and  the  memorandum 
of  agreement  signed  by  them.  In  effect,  it  was  the  not  unusual 
transaction  of  a person  purchasing  his  way  into  an  established 
business,  paying  a bonus  or  premium  to  the  owner,  and  entering 
into  partnership  with  him,  upon  terms  arranged  between  them. 

The  bonus  or  premium  to  be  paid  was  $2,000;  but,  as  Living 
was  unable  to  provide  the  money,  and  Fox  was  willing  to  accept 
the  promissory  note  of  the  defendants,  Living  prevailed  upon 
them  to  join  him  in  the  note  in  question.  It  is  dated  the  1st 
July,  1907,  payable  three  months  after  date,  and  therefore  fell 
due  and  payable  on  the  4th  October,  1907.  It  was  received  by 
the  plaintiffs  from  Fox  on  the  12th  September,  1907,  and  has 
been  in  their  possession  ever  since. 

At  the  time  when  the  note  was  received,  the  plaintiffs  had 
under  discount  a note  for  $500  made  by  Fox  dated  the  4th  Sep- 
tember, payable  in  thirty  days,  but  beyond  this  he  was  not  in- 
debted to  the  plaintiffs. 

There  is  upon  the  testimony  a far  from  satisfactory  account 
of  the  terms  or  conditions  under  which  the  note  was  left  with  the 
plaintiffs.  Fox  was  positive  that  it  was  left  for  collateral  and 
collection.  The  plaintiffs’  manager  would  not  use  the  term 
“collateral.”  He  said  it  was  left  “for  what  it  was  worth;”  and 
the  records  shew  that  it  was  entered  in  the  collection  and  not 
in  the  collateral  register.  The  learned  Chancellor  found  as  a 
fact  that  it  was  left  as  collateral  security  and  also  for  collection; 
while,  in  the  Divisional  Court,  the  learned  Chief  Justice  said 
that,  notwithstanding  Fox’s  evidence,  the  impression  made  upon 
him  was  that  the  note  was  indorsed  to  the  plaintiffs  merely  for 
collection,  and  not  as  collateral.  The  conclusion  I have  reached 
upon  the  question  of  consideration  renders  it  unnecessary  finally 
to  decide  between  these  conflicting  views;  but,  on  the  whole, 
I incline  to  the  latter.  Even  so,  in  my  view,  it  still  leaves  the 
plaintiffs  entitled  to  the  judgment  awarded  to  them  by  the  Chan- 
cellor. 

As  indorsees  for  collection  of  the  note,  they  were  entitled  to 
a lien  on  it  for  debts  that  were  then  presently  payable  and  from 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson. 

Moss,  C.J.O. 


188 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson. 

Moss,  O.J.O. 


time  to  time  thereafter  becoming  payable.  The  claim  now  made 
is  in  respect  of  an  indebtedness  of  Fox  which  became  payable 
from  and  after  the  24th  November,  1908.  Prior  to  that  date, 
there  was  a period>  in  which  Fox  was  free  from  direct  indebted- 
ness, although  there  were  some  outstanding  notes  or  drafts  under 
discount;  a time  during  which,  according  to  the  plaintiffs’  mana- 
ger, Fox  was  at  liberty  to  take  the  note  out  of  the  plaintiffs’ 
possession  had  he  chosen.  But  Fox  did  not  take  it  away,  and 
it  remained  with  the  plaintiffs  until  the  debts  now  due  and  pay- 
able had  accrued.  And,  unless  something  had  occurred  between 
Fox  and  Living  prior  to  the  24th  November  which  furnished  the 
latter  with  a defence  to  an  action  on  the  note,  the  plaintiffs  are 
entitled  as  holders  to  a lien  for  the  amount  of  Fox’s  indebtedness 
to  them. 


The  defence  set  up  is  want  of  consideration  and  total  failure 
of  consideration.  Upon  the  evidence,  it  seems  to  me  to  be  plain 
that  there  was  good  consideration  for  the  note  when  it  was  given. 
Living  obtained  an  interest  in  Fox’s  agency  business  which  he 
then  had  and  which  he  might  thereafter  acquire,  and  became 
a partner  on  equal  terms  with  Fox.  He  was  and  acted  as  a 
partner  for  at  least  fifteen  months,  during  which  time  he  says 
he  earned  or  become  entitled  to  several  thousand  dollars  as 
profits,  and  actually  received  about  $1,000  for  his  own  use.  He 
was  known  to  at  least  some  of  the  customers  or  persons  with 
whom  or  on  whose  behalf  he  and  Fox  executed  commissions,  and 
drafts  in  the  firm  name  had  been  drawn  upon  some  of  them. 
Upon  the  facts,  it  would  be  impossible  for  Fox  to  deny  that 
Living  was  a co-partner  or  legally  to  refuse  him  his  rights  as 
such.  Neither  could  Living  be  heard  to  say,  as  against  persons 
dealing  with  the  firm,  that  he  was  not  a partner.  When,  there- 
fore, the  note  was  received  by  the  plaintiffs,  it  was  a note  for 
good  consideration,  not  overdue. 

But  then  it  is  said  that  a failure  of  consideration  accrued  by 
reason  of  what  took  place  between  Fox  and  Living  in  July,  1908, 
when  Living  left  the  firm’s  place  of  business.  What  occurred 
at  that  time  could  have  no  greater  effect  than  a dissolution  of 
the  partnership.  If,  as  Living  seems  to  think,  it  was  a wrongful 
expulsion,  that  could  not  alter  his  right  to  be  restored,  or,  if  the 


XXVI.] 


ONTARIO  LAW  REPORTS. 


189 


conditions  appeared  to  be  such  as  to  render  impossible  a con- 
tinuance of  the  partnership,  to  a judgment  for  dissolution,  upon 
such  terms  as  the  circumstances  justified.  Whether  Living  con- 
sidered that  a dissolution  was  effected  by  what  occurred,  or  con- 
sidered that  he  was  wrongfully  expelled,  he  seems  to  have  ac- 
quiesced, and  to  have  taken  no  steps  either  to  be  restored  or  to 
procure  a taking  of  the  partnership  accounts. 

The  circumstance  that  Living  paid  or  was  paying  a premium 
or  bonus  could  make  no  difference  in  this  case,  where  there  was 
no  stipulation  or  agreement  as  to  the  time  of  the  duration  of  the 
partnership. 

Whether  through  oversight  or  inadvertence,  there  was  no 
agreement  that  the  partnership  should  continue  for  a specified 
time  or  definite  period.  But  the  partnership  was  in  fact  created; 
and,  that  being  so,  its  subsequent  termination  would  not  create 
a total  failure  of  consideration  so  as  to  affect  the  validity  of  the  note 
in  the  hands  of  either  Fox  or  the  plaintiffs;  although,  upon  taking 
the  partnership  accounts,  Living  might  be  able  to  shew  himself  en- 
titled to  a return  of  part  of  the  premium.  The  question  is  dis- 
cussed at  length  in  Jindley  on  Partnership,  7th  ed.,  p.  625  et  seq. 
At  p.  626  it  is  said:  “In  the  first  place,  assuming  the  partnership 
to  have  been  in  fact  created,  it  is  clear  that  there  has  not  been 
a total  failure  of  consideration  for  the  premium;  and,  conse- 
quently, it  cannot  be  recovered  as  money  paid  for  a consideration 
which  has  failed.  In  the  next  place,  persons  who  enter  into 
partnership  know  that  it  may  be  determined  at  any  time  by 
death  and  other  events;  and  unless  they  provide  against  such 
contingencies,  they  may  fairly  be  considered  as  content  to  take 
the  chance  of  their  happening,  and  the  tendency  of  modern  deci- 
sions is  to  act  on  this  principle.’’  It  does  not  necessarily  follow 
that  no  part  of  the  premium  is  to  be  returned  in  any  case.  On 
the  contrary,  it  appears  from  many  authorities  that  in  cases 
where  the  dissolution  was  not  brought  about  by  wrongful  con- 
duct on  the  part  of  the  partner  who  paid  the  premium,  or  under 
circumstances  for  which  he  is  responsible,  a return  of  part  may 
be  awarded.  But  as  to  what  part,  the  learned  author  says  (p. 
630):  “There  is  no  definite  rule  for  deciding  in  any  particular 
case  the  amount  which  ought  to  be  returned;”  and  instances 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson. 

Moss,  C.J.O. 


190 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson. 

Moss,  C.J.O. 


ONTARIO  LAW  REPORTS.  [vol. 

» 

are  given  of  the  circumstances  which  are  to  be  taken  into  con- 
sideration. 

The  defendants’  difficulty  in  this  case  is,  that  they  have  not 
shewn  the  circumstances  attending  the  dissolution  sufficiently  to 
enable  a decision  to  be  given  as  to  whether  Living  is  entitled  to 
a return  of  part  of  the  premium.  There  are  charges  and  counter- 
charges of  misconduct  on  the  part  of  Fox  and  Living;  but  they 
are  not  before  the  Court;  and  it  was  for  the  defendants,  if  they 
desired  to  avail  themselves  of  the  defence  of  partial  failure,  to 
have  put  the  case  in  proper  train  for  inquiry.  Neither  is  there 
material  upon  which  can  be  ascertained  what,  if  any,  proportion 
of  the  premium  should  be  returned — nothing  to  reduce  the  amount 
of  the  indebtedness  as  represented  by  the  note.  The  burden 
of  shewing  this  was  on  the  defendants,  and  it  was  not  for  the 
plaintiffs  to  shew  the  state  of  the  accounts.  Payments,  either  by 
reduction  of  the  amount  of  the  premium  or  receipt  by  Fox  of 
profits  of  the  business,  were  to  be  proved  by  the  defendants,  and 
they  failed  to  shew  either. 


The  appeal  should  be  allowed  and  the  judgment  at  the  trial 
restored  with  costs  of  the  appeal  to  the  Divisional  Court  and 
this  Court. 


Meredith,  J.A.: — The  first  question  involved  in  this  case  is 
one  of  fact,  namely:  What  was  the  nature  and  effect  of  the  trans- 
action between  the  bank  and  Fox  by  which  the  bank  became  the 
holders  of  the  promissory  note  in  question,  of  which  he  was  the 
payee,  by  virtue  of  the  indorsement  of  it  by  him  over  to  their  order, 
and  the  delivery  of  it  at  the  same  time,  by  him  to  them. 

We  are,  of  course,  not  bound  by  the  present  impressions,  of 
either  of  the  parties  to  that  transfer,  as  to  its  true  nature  and 
effect;  memory,  at  best,  is  likely  to  be  more  or  less  treacherous, 
and  none  the  less  because  one  of  the  persons  was  the  manager  of 
a bank,  upon  whose  mind  impressions  of  banking  transactions 
were  being  continuously  made  in  large  numbers.  In  such  a case 
as  this,  the  surrounding  circumstances  and  the  probabilities  are 
very  useful  witnesses. 

Fox  was  a customer  of  the  bank,  and  a man  whose  business 
affairs,  or  other  exigencies,  made  it  necessary  Ar  expedient  for 
him  to  borrow  money  from  time  to  time,  and  the  note  in  ques- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


191 


tion  was,  at  least,  likely  to  be  helpful  and  to  be  used  in  obtaining 
the  necessary  credit  in  such  an  institution  as  this  bank — one  of 
the  several  foremost  in  this  country. 

There  are  really  only  three  purposes  for  which  it  is  possible 
that  the  transfer  of  the  note  could  have  taken  place:  (1)  for 
safe-keeping;  (2)  as  security  for  money  advanced  or  to  be 
advanced;  or  (3)  for  collection. 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson, 

Meredith,  J.A. 


Safe-keeping — mere  custody — is  out  of  the  question:  no  one 
suggests  it;  it  ought  not  to  have  been  indorsed  over  if  that 
were  the  intention  of  the  parties.  ■ 

Collection  alone  seems  to  me  to  be  also  out  of  the  question; 
no  one  testifies  to  it;  and  no  one,  having  regard  to  all  the  circum- 
stances of  the  case,  could  reasonably  conclude  that  such  was  the 
full  nature  and  effect  of  the  transaction.  It  was  the  note  of  the 
man’s  partner,  transferred  while  they  were  carrying  on  business 
together,  many  months  before  the  rupture  between  them:  it 
was  not  a note  of  the  ordinary  mercantile  character  usually  paid 
and  taken  up  through  the  payee’s  banker.  What  reason  can  be 
suggested  for  placing  the  promissory  note  of  one’s  partner  in 
a bank  for  collection:  this  partner  was  the  principal  debtor,  and 
he  was  at  hand:  if  it  be  suggested  that  the  payee  knew  or  ex- 
pected that  the  partner  would  resist  payment,  then  it  is  almost 
certain  that  it  would  be  transferred  so  as  to  give  the  bank  higher 
rights  than  the  payee’s. 

The  testimony  of  the  bank’s  manager  is  that  the  note  was 
taken  by  the  bank,  through  him,  for  what  it  was  worth;  that 
is,  of  course,  for  what  it  was  worth  in  Fox’s  dealings  with  the  bank 
and  his  obligations  to  the  bank  in  connection  with  them,  not  for 
the  small  commission  to  be  had  for  collection  if  it  were  paid  at 
maturity.  The  testimony  of  Fox  at  the  trial  was  that  the  purpose 
of  the  transaction  was  that  the  bank  should  hold  the  note  as 
collateral  security  for  moneys  advanced  to  him  from  time  to 
time;  and,  he  added,  “from  drafts  going  through;”  words  which 
do  not  seem  to  me  to  have  been  intended  to  put  any  express 
limitation  upon  the  extent  of  the  security,  but  rather  to  indicate 
that  which  was  in  the  mind  of  the  witness  at  the  moment  of  making 
the  statement;  and  was  his  way  of  expressing  the  character  of 
the  business  which  he  did  with  the  bank  and  for  which  they  would 
need  security;  strictly  speaking,  they  must  have  meant  more 


192 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson. 

Meredith,  J.A. 


[VOL. 


than  they  literally  convey.  -No  security  would  be  needed  for 
drafts  going  through  for  collection;  security  would  be  needed 
only  for  money  advanced,  whether  on  “ paper  ” strictly  called 
drafts  or  not. 

It  is  quite  obvious  that,  if  the  manager  had  regard  for  his 
masters’  interests,  or  for  his  own  reputation  as  a banker,  he  would 
have  taken  the  note  as  security  for  such  sum  as  might  from  time 
to  time  be  advanced  by  the  bank  to  Fox,  especially  as  there  can 
be  no  manner  of  doubt  that  Fox  was  quite  willing  that  the  bank 
should  so  acquire  and  hold  it;  that  is,  that  it  should  be  held  as 
security,  for  the  amount  of  Fox’s  indebtedness  to  the  bank  from 
time  to  time  in  his  account  with  them.  If  we  draw  the  conclu- 
sion, from  circumstances  fully  warranting  it,  that  the  banker 
would  take  all  the  security  he  could  get,  and  would  try  to  get 
more,  we  shall  be  very  much  nearer  the  truth  in  almost,  if  not 
quite,  every  case,  than  if,  from  the  same  circumstances,  we  con- 
clude that  he  would  reject  security  which  he  might  as  easily  have 
had  and  would  reject  it  without  rhyme  or  reason. 

So  that  we  have  a customer,  hungry  for  credit  on  the  best 
terms  obtainable,  with  a negotiable  instrument  by  which  he  can 
get  more  credit  and  better  terms  if  he  pledge  it  as  a standing 
security;  and  a banker  always  hungry  of  every  available  security; 
and  so  you  might  as  well  expect  two  hungry  men  to  put  aside, 
instead  of  eating,  good  food  set  before  them  to  be  eaten,  as  to 
expect  this  note  under  the  circumstances  to  be  laid  aside  for  col- 
lection only:  I accept  Fox’s  statement  as  to  the  purpose  of  the 
transfer  of  it  without  any  sort  of  doubt. 

There  is  really  nothing,  that  militates  against  this  view  of  this 
case,  in  any  of  the  circumstances  relied  upon  by  the  respondents: 
it  was  quite  right  in  any  case  to  enter  the  note  in  the  bankas 
collection  docket:  why  not?  It  was  in  the  bank’s  interests, 
and  no  doubt  their  duty,  to  send  it  through  the  regular  process 
for  collection.  It  was  not  discounted:  the  proper  course  of  the 
bank  seems  to  me  to  have  been  taken  in  taking  the  usual  steps 
to  enable  the  makers  to  pay  at  maturity:  and  would  have  been 
taken  in  placing  the  proceeds  of  the  note  to  the  credit  of  Fox’s 
account,  if  it  had  been  paid. 

If  for  collection  only,  it  would  be  odd  that,  for  many  weeks 
after  it  became  payable,  no  steps  of  any  kind  were  taken  respect- 
ing it:  remaining  as  it  did  is,  of  course,  that  which  was  entirely 


XXVI.] 


ONTARIO  LAW  REPORTS. 


193 


right  if  it  were  a subsisting  security.  And,  beside  all  this,  as 
I have  before  mentioned,  if  there  were  any  likelihood  of  the  de- 
fences which  are  now  being  set  up,k  it  would  have  been  better 
for  Fox  that  the  bank  should  become  and  remain  throughout 
holders  for  value,  unaffected  by  any  equity  in  respect  of  it,  to 
the  extent  of  his  indebtedness  to  it. 

The  fact  that  no  “ hypothecation  paper”  was  taken  with  it 
has  little,  if  any,  weight.  It  was  a single  note,  and  the  course 
of  business  of  the  bank  in  that  respect,  at  the  branch  where  the 
transaction  took  place,  is  testified  by  the  manager  to  have  been 
as  follows,  in  this  respect: — 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson. 

Meredith.  J.A. 


“Q.  And  you  took  a hypothecation,  I suppose,  at  the  time? 


A.  No. 

“Q.  Isn’t  that  usual  when  notes  are  left  at  a bank,  except 
when  they  are  left  for  mere  safe-keeping?  A.  It  is  more  regular. 
Sometimes  one  way  and  sometimes  the  other.” 

And  I cannot  think  that  the  testimony  of  the  bank  manager 
warrants  any  such  conclusion  as  that  Fox  might  have  taken  up 
this  note  at  any  time  when  he  was  under  any  liability  to  the 
bank:  he  could,  of  course,  have  taken  it  up  at  any  time  when 
no  such  obligation  existed;  but,  of  course,  at  the  risk  of  not 
getting  credit  when  he  next  sought  it. 

If  Fox  were  making,  and  if  in  law  he  could  make,  an  appro- 
priation of  the  proceeds  of  the  note  to  the  payment  of  the  balance 
of  his  account  by  the  bank,  on  the  ground  that  the  bank  never 
acquired  or  held  the  note  in  this  way,  would  he  be  likely  to  suc- 
ceed? We  must  not  let  sympathy  for  the  man  who  made  the 
note,  and  got  others  to  join  with  him  as  makers,  and  who  plainly 
has  not  come  very  well  out  of  his  co-partnership  experience  with 
Fox,  affect  the  strict  legal  rights  of  the  parties.  If  it  may  be 
said,  to  the  bank,  why  did  you  not  take  a writing  evidencing 
the  fact,  if  it  were  a fact,  that  you  were  to  hold  the  note  as  your 
continuing  security?  might  it  not,  with  much  greater  force,  be 
said  to  Fox,  why  did  you  not  take  a receipt  for  the  note  shewing 
that  it  was  transferred  for  collection  only?  and  why  not  take 
the  note  up,  or  do  something  in  regard  to  it,  after  failure  of  the 
makers  to  pay? 

The  disinclination  of  the  bank  to  have  the  note  sued  on  in 
their  name  does  not  help  the  respondents;  if  they  were  collectors 


194 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson. 

Meredith,  J.A. 


[VOL. 


merely  in  the  sense  of  a collecting  agency,  they  would  be  less  likely 
to  have  such  a disinclination.  Such  a disinclination  is  natural 
in  any  case,  and  the  more  jso  at  the  instance  of  another  and  for 
his  benefit;  but,  in  this  case,  the  bank  have  been  driven  to  sue 
in  their  own  interests  now. 

My  conclusion  upon  the  first  question  involved  is,  that  the 
note  was  taken  and  always  held  by  the  bank  as  security  for  the 
repayment  of  all  that  might  from  time  to  time  be  owing  by  Fox 
to  the  bank:  see  Atwood  v.  Crowdie,  1 Stark.  483. 

If  I am  right  as  to  the  facts,  there  can  be  no  doubt  that  the 
note  is  good,  in  the  bank’s  hands,  against  the  makers  of  it,  for 
the  amount  of  the  indebtedness  of  Fox  to  the  bank,  for  which 
judgment  was  entered  in  favour  of  the  bank  at  the  trial:  the 
fact  that  at  some  times  there  was  nothing  due  from  Fox  to  the 
bank  would  not  cut  out  that  right  or  deprive  the  bank  of  the 
position  of  a holder  in  due  course;  there  would  not  be  by  im- 
plication a new  transfer  of  the  note  as  security  for  each  separate 
indebtedness  or  advance;  there  would  be  but  the  one  trans- 
action, to  which  all  changes  in  the  account  between  Fox  and 
the  bank  would  be  referable;  everything  would  relate  back  to 
the  one  transfer,  made  while  the  note  was  current;  although,  of 
course,  it  was  quite  competent  for  Fox  to  have  taken  up  the  note 
at  any  time  when  there  was  no  obligation  on  his  part  to  the 
bank:  see  Atwood  v.  Crowdie,  1 Stark.  483 — a case  extremely 
like  this  case  in  substance. 

I would  allow  the  appeal  and  restore  the  judgment  to  the 
extent  of  the  amount  of  the  plaintiffs’  claim  proved  at  the  trial. 

Garrow  and  Magee,  JJ.A.,  agreed  in  allowing  the  appeal. 

Maclaren,  J.A.  (dissenting): — This  action  was  brought  by 
the  bank  against  two  of  the  three  makers  of  a joint  and  several 
promissory  note  for  $2,000  to  the  order  of  one  C.  H.  Fox,  who 
indorsed  it  over  to  the  bank  before  maturity.  It  was  not  pro- 
tested, and  has  not  been  paid.  The  action  was  tried  by  Boyd, 
C.,  who  held  that,  under  sec.  54,  sub-sec.  2,  of  the  Bills  of  Ex- 
change Act,  the  bank  was  entitled  to  recover  against  the  makers 
the  sum  of  $1,116.39,  being  the  amount  of  their  lien  for  the  in- 
debtedness of  Fox.  The  defendants  having  appealed  to  the 
Divisional  Court,  the  judgment  was  reversed  and  the  action 


XXVI.] 


ONTARIO  LAW  REPORTS. 


195 


dismissed,  on  the  ground  that  the  bank  was  not  a holder  in  due 
course,  but  acquired  its  lien  after  maturity  and  dishonour  and 
after  a total  failure  of  consideration.  Britton,  J.,  dissented. 

The  note  in  question  was  given  under  the  following  agree- 
ment : — 

“I  agree  to  buy  one-half  interest  in  the  manufacturers’  agency 
of  Mr.  Chas.  Fox,  in  the  city  of  Vancouver;  to  have  one-half 
interest  in  all  agencies  controlled  by  him  and  any  agencies  which 
he  shall  secure:  Mr.  Fox  to  have  one-half  interest  in  all  agencies 
which  I shall  secure — for  the  sum  of  two  thousand  dollars  ($2,000). 

“That  Mr.  Fox  and  myself  to  each  put  into  the  business  the 
sum  of  one  thousand  dollars  ($1,000). 

“That  I shall  work  my  way  to  Montreal,  returning  to  Van- 
couver as  soon  as  possible. 

“Mr.  Fox  and  myself  to  each  draw  a stated  salary  agreeable 
to  each  other. 

“Balance  of  commissions,  after  salary  and  general  expense 
accounts  are  deducted,  to  be  equally  divided. 

“Dated  at  Vancouver,  in  the  Province  of  British  Columbia, 
this  19th  day  of  March,  1907.  C.  H.  Fox.  Alf.  H.  Living.” 

On  the  same  day,  Fox  gave  Living  the  following  letter:  “Van- 
couver, Canada,  March  19th,  1907.  Mr.  A.  Living.  Dear  Sir: 
Confirming  our  agreement  of  to-day,  it  was  understood  that  I 
will  at  my  own  expense  take  a trip  to  England  and  Germany 
during  the  next  year  to  secure  better  agencies,  particularly  cutlery, 
household  furnishings,  and  fire-arms.  Yours  truly,  C.  H.  Fox.” 

Living  had  not  the  $2,000  to  pay  Fox;  but,  after  getting  a 
note  that  was  not  satisfactory  and  was  returned,  he  finally  per- 
suaded the  two  defendants,  his  uncle  Thompson,  and  his  mother- 
in-law  Mrs.  Turley,  both  of  Ottawa,  to  join  him  in  a joint  and 
several  note  dated  Vancouver,  July  1st,  1907,  for  $2,000,  payable 
in  three  months  after  date,  to  the  order  of  Fox. 

Early  in  August,  Fox  tried  to  discount  this  note  at  the  Mer- 
chants Bank,  Vancouver;  but,  after  inquiry,  the  manager,  Harri- 
son, declined  to  discount  it.  Fox  took  it  away,  but  on  the  12th 
September,  1907,  he  brought  it  back  and  left  it  with  the  manager. 
There  is  a question  as  to  the  terms  on  which  it  was  left,  which 
will  be  considered  presently. 

The  defendants  urged  in  the  Courts  below  and  before  us 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 

v. 

Thompson. 

Maclaren,  J.A. 


196 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson. 

Maclaren,  J.A. 


that  Fox,  when  he  was  the  legal  holder  of  the  note  after  maturity, 
had  given  time  to  Living,  who  was  his  only  debtor,  the  defen- 
dants being  merely  sureties,  and  that  on  this  account  the  defen- 
dants were  released.  It  was  held  by  both  Courts  that  this  de- 
fence was  not  proved;  and  I am  of  opinion  that  they  were  clearly 
right. 

It  was  also  argued  before  us  that,  as  the  defendants  were 
mere  accommodation  makers,  the  bank  could  not,  after  maturity 
and  dishonour,  acquire  a good  title  to  the  note  as  against  the 
sureties,  and  that  they  were  released  by  not  being  notified  of 
the  dishonour.  Being  makers,  they  were  not  entitled  to  notice, 
and  the  mere  fact  of  their  being  accommodation  makers  was  not 
alone  sufficient  to  prevent  the  bank  acquiring  a good  title  after 
maturity  for  value,  as  this  is  not  an  equity  attaching  to  a note. 
See  Chalmers  on  Bills  of  Exchange,  7th  ed.,  p.  130;  1 Daniel 
on  Negotiable  Instruments,  sec.  726;  Sturtevant  v.  Ford  (1842), 
4 M.  & G.  101. 

When  we  come  to  deal  with  the  main  question,  we  find  the 
situation  a very  unsatisfactory  one,  as  the  business  between 
Fox  and  Living  was  done  in  the  most  slipshod  and  irregular 
manner,  as  were  also  the  dealings  between  Fox  and  the  bank 
with  respect  to  the  note  in  question.  Neither  Fox  nor  Living 
was  made  a defendant  in  the  present  action;  but  they  were 
both  witnesses  at  the  trial;  and,  wherein  they  differ  in  their 
testimony,  the  Chancellor  does  not  express  any  preference . 
Harrison,  the  manager  of  the  bank,  who  personally  made  the 
arrangements  with  Fox  regarding  the  note,  was  not  at  the  trial, 
he  having  been  previously  examined  at  Vancouver  under  a com- 
mission; so  that,  as  regards  his  testimony,  we  are  in  the  same 
position  as  was  the  Chancellor.  Where  his  testimony  con-, 
flicts  with  that  of  Fox,  I prefer  to  accept  his  version  of  the  facts 
especially  as  he  is  corroborated  by  the  books  and  by  the  entries 
and  records  made  at  the  time.  As  to  the  terms  on  which  Fox 
left  the  note  with  him,  Harrison  simply  says,  “He  left  it  with 
me  for  what  it  was  worth.” 

From  the  evidence  of  Harrison  it  appears  that  on  the  4th 
September,  1907,  he  had  discounted  for  Fox  a $500  note,  which 
was  current  on  the  12th  September,  when  the  note  now  sued 
on  was  left  with  him  at  the  bank.  He  also  discounted  another 


XXVI.] 


ONTARIO  LAW  REPORTS. 


197 


note  for  $300  for  Fox  on  the  29th  September,  1907.  From  this 
time  onward  until  the  25th  November,  1908,  Fox  was  from  time 
to  time  indebted  to  the  bank  in  varying  amounts;  and  at  times, 
sometimes  for  weeks  at  a time,  he  was  free  from  such  indebted- 
ness. From  the  25th  November,  1908,  until  this  action  was 
brought  on  the  2nd  March,  1909,  he  was  indebted  continuously. 
Harrison’s  evidence  as  to  the  position  of  the  note  during  these 
periods  is  given  as  follows:  “Q.  And  at  any  time  during  this 
period,  when  Fox  was  indebted  to  the  bank,  he  could  have  taken 
the  note  out  of  your  possession  and  done  whatever  he  chose  with 
it?  A.  Yes,  had  he  chosen.”  As  a banker,  he  knew  that  this 
correctly  described  the  position  of  the  bank  with  respect  to  a note 
left  with  it  by  a customer,  as  he  says  this  one  was,  simply  “for 
what  it  was  worth,”  and  without  any  special  pledging  or  hypothe- 
cation, and  the  rights  which  the  bank  had  under  the  banker’s 
lien,  whereby  it  has  the  right  to  retain  any  such  note  for 
any  defyt  due  to  it;  but  has  not  the  right  to  retain  it  for 
any  liability  which  has  not  yet  become  due  or  payable.  See 
Grant  on  Banking,  2nd  ed.,  p.  306;  1 Halsbury’s  Laws  of  Eng- 
land, sec.  1258. 

It  was  urged  on  behalf  of  the  bank,  on  the  authority  of  Atwood 
v.  Crowdie,  1 Stark.  483,  that,  although  there  was  no  lien  when 
there  was  nothing  due,  yet,  on  the  $450  note  becoming  due  on 
the  25th  November,  1908,  the  lien  of  the  bank  would  revive  as 
of  the  12th  September,  1907,  the  date  of  the  original  delivery  of 
the  note  to  the  bank. 

Such  is  not  the  effect  of  Atwood  v.  Crowdie.  Lord  Ellen- 
borough’s  holding  was  not  what  is  claimed,  but  was  that  the 
lien  on  the  accommodation  bills  having  ceased  to  attach  when 
the  debt  was  paid  “by  allowing  them  to  remain  in  the  hands  of 
the  plaintiffs,  the  lien  revested,  when  upon  fresh  advances  made, 
the  balance  turned  in  favour  of  the  plaintiffs.”  What  the  case 
really  decided  was  that  the  lien  would  revive  as  of  the  date  of 
the  fresh  advances,  and  that  a party  might  acquire  a lien  on 
accommodation  bills  after  their  maturity.  This  case,  so  far  as 
it  is  in  point,  is  entirely  in  favour  of  the  defendants,  as  it  would 
shew  that  the  bank  is  in  the  position  of  any  other  holder 
taking  a bill  after  maturity — it  takes  it  subject  to  its  equities. 
The  legal  position  of  the  bank  in  this  case  is  the  same  as  though 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson. 

Maclaren,  J.A. 


198 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 

v. 

Thompson. 

Maclaren,  J.A. 


[VOL. 


it  had  returned  the  note  to  Fox  when  there  was  nothing  owing 
by  him,  and  he  had  redelivered  it  to  the  bank  when  he  again 
became  indebted  to  the  bank  on  the  25th  November. 

The  next  question  is,  whether  there  was  such  a failure  of 
consideration  as  between  Fox  and  Living  as  would  prevent  the 
bank  from  recovering,  as  was  held  by  the  Divisional  Court.  In 
order  to  decide  as  to  this,  we  have  to  look  at  their  agreement  of 
the  19th  March,  1907,  set  out  above,  and  to  consider  their  rela- 
tions and  the  dealings  between  them,  in  so  far  as  they  may  affect 
this  note  up  to  the  25th  November,  1908. 

A glance  at  the  agreement  will  shew  how  crudely  and  inarti- 
ficially  it  is  drawn;  and  a perusal  of  the  agreement  and  the  evi- 
dence will  shew  how  completely  each  of  the  parties  appears  to 
have  failed,  in  almost  every  particular,  to  carry  out  fhe  terms 
and  stipulations  binding  upon  them  respectively. 

The  evidence  shews  that  Fox  never  made  over  or  gave  to 
Living  the  one-half  or  any  other  interest  in  any  of  the  agencies 
he  then  had  or  secured  afterwards,  and  that  Living  never  gave 
him  the  $2,000  or  any  part  of  it;  that  neither  of  them  paid  in 
any  part  of  the  $1,000  which  they  were  each  to  contribute  as 
capital;  that  Fox  kept  sole  control  of  the  business  premises,  his 
own  name  alone  appearing  on  the  sign;  that  no  partnership 
books  were  ever  opened  or  kept;  that  the  bank  account  remained 
in  the  name  of  Fox  individually;  and  that  he  did  not  go  to  Eng- 
land or  Germany,  as  he  undertook  to  do,  in  order  to  secure  better 
agencies.  The  nearest  approach  to  anything  like  a partnership 
appears  to  have  been  their  getting  a few  months  after  the  agree- 
ment some  stationery  with  the  name  of  “Fox  & Living”  upon 
it.  Fox  says  this  was  used  for  some  of  their  correspondence, 
which  Living  denies.  Their  proposed  partnership  amounted  to 
so  little  that,  when  they  quarrelled  and  Fox  put  Living  out,  all 
the  latter  had  to  do  was  to  pick  up  a few  private  letters  off  the 
desk  and  walk  out.  Up  to  the  time  of  the  trial  (nearly  two 
years)  neither  of  them  had  taken  any  further  steps  to  settle  up 
their  business.  The  only  question,  however,  with  which  we  have 
to  deal  at  present  is  that  of  the  consideration  or  the  failure  of 
consideration  for  the  note.  This  was  the  $2,000  which  Living 
was,  under  the  first  paragraph  of  the  agreement,  to  pay  Fox  for 
a one-half  interest  in  all  the  agencies  then  controlled  by  Fox, 


XXVI.] 


ONTARIO  LAW  REPORTS.  , 


199 


and  in  any  he  might  thereafter  secure,  possibly  including  his 
undertaking  to  go  to  England  and  Germany  at  his  own  expense, 
no  part  of  which  was  carried  out  by  Fox,  so  that  there  was  a 
total  failure  of  consideration.  This  being  a defect  of  title  within 
the  meaning  of  sec.  70  of  the  Bills  of  Exchange  Act,  or  equity 
attaching  to  the  note,  and  existing  before  and  at  the  time  that 
the  lien  upon  which  the  bank  sued  had  its  origin,  which  was 
long  after  the  maturity  of  the  note,  the  bank  could  acquire  no 
better  title  than  Fox  then  had;  and  the  note  was  void  for  want 
of  consideration. 

If  the  parties  were  going  into  matters  beyond  this,  it  could 
only  be  done,  as  the  learned  Chancellor  suggested,  in  proceedings 
to  which  Fox  and  Living  were  parties. 

For  these  reasons  and  others  given  by  Falconbridge,  C.J., 
I am  of  opinion  that  the  judgment  of  the  Divisional  Court  was 
right,  and  should  be  affirmed. 


C.  A. 
1912 

Merchants 
Bank  of 
Canada 
v. 

Thompson. 


Maclaren,  J.A. 


Appeal  allowed;  Maclaren,  J.A.,  dissenting. 


[IN  THE  COURT  OE  APPEAL.] 

County  of  Wentworth  v.  Township  of  West  Flam- 
borough. 


C.  A. 
1912 


Highway — Township  Boundary  Line — “ Deviation ” — Substitution — Municipal  April  15 

Act,  1903,  sec.  622. 

Held,  affirming  the  judgment  of  a Divisional  Court,  23  O.L.R.  583,  that  the 
road  in  question  was  and  is  a “deviation”  of  a town-line  road,  within  the 
meaning  of  sec.  622  of  the  Municipal  Act,  1903. 

Township  of  Fitzroy  v.  County  of  Carleton  (1905),  9 O.L.R.  686,  specially 
referred  to. 

Appeal  by  the  defendants  from  the  judgment  of  a Divisional 
Court,  23  O.L.R.  583. 

November  27,  1911.  The  appeal  was  heard  by  Moss,  C.J.O., 

Garrow,  Maclaren,  Meredith,  and  Magee,  JJ.A. 

G.  Lynch-Staunton,  K.C.,  for  the  defendants,  argued  that  the 
judgment  of  the  learned  trial  Judge  should  be  restored,  on  the 
ground  that  the  road  in  question  was  not  a deviation  within  the 
meaning  of  the  Municipal  Act.  Reference  was  made  to  County 
of  Victoria  v.  County  of  Peterborough  (1889),  Cameron’s  Sup.  Ct. 

Cas.  608,  and  the  same  case  in  (1888),  15  A.R.  617,  especially 
per  Osier,  J.A.,  at  p.  627. 


200 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

County  of 
Wentwoetii 
v. 

Township 
of  West 
Flam- 
borough. 


[VOL. 

J.  L.  Counsell,  for  the  plaintiffs,  relied  upon  the  judgment  of 
the  Divisional  Court  and  the  cases  therein  referred  to.  The 
merits  of  the  case  are  with  the  respondents,  as  the  road  is  ad- 
mittedly useful  to  the  defendants,  and  the  money  in  respect  of 
which  the  claim  is  made  has  been  properly  expended. 

Lynch-Staunton,  in  reply. 

April  15,  1912.  Garrow,  J.A. : — Appeal  by  the  defendants 
from  the  judgment  of  a Divisional  Court  reversing  the  judgment 
at  the  trial  of  Middleton,  J.,  who  dismissed  the  action. 

The  defendant  applied  for  leave  to  appeal,  and  such  leave 
was  granted,  but  confined  to  one  point,  namely,  whether  the  road 
in  question  was  and  is  a deviation  road.  See  2 O.W.N.  1223,  and 
note  at  p.  592  of  the  report  in  23  O.L.R. 

The  defendants’  objections  to  an  affirmative  answer  to  this 
question  seem  to  be:  (1)  as  to  its  origin,  which  it  is  said  was 
the  Carroll  plan;  and  (2)  that  the  road  does  not  return  to  the 
line  of  the  original  boundary  line  road  allowance. 

These  objections  are  not  unlike  those  considered  by  this  Court 
in  Township  of  Fitzroy  v.  County  of  Carleton  (1905),  9 O.L.R. 
686.  There  is  evidence  here,  slight  it  is  true,  that  before  the 
registration  of  the  Carroll  plan  the  travelling  public  had  used 
a road  in  the  nature  of  a trespass  road  upon  or  near  the  line  of 
the  road  afterwards  laid  out  upon  that  plan,  just  as  in  the  Fitzroy 
case  a trespass  road  had  preceded  the  formal  action  of  the  town- 
ship councils.  And  in  that  case,  as  in  this,  the  deviation  did 
not  terminate  in  the  boundary  line  between  the  two  townships 
where  it  originated,  but  was  carried  across  another  township 
boundary,  and  thence  through  that  township  into  the  original 
line.  The  question  there  arose  under  sec.  617,  sub-secs.  (1)  and 
(2),  of  the  Municipal  Act,  3 Edw.  VII.  ch.  19.  Here  it  arises 
under  sec.  622,  which  docs  not  contain  the  condition  in  sec.  617 
that  the  deviation  must  be  only  for  the  purpose  of  obtaining  a 
good  line  of  road.  But,  notwithstanding  that  difference,  the 
question  what,  under  the  statute,  is  a deviation  road,  must, 
under  both  sections,  in  my  opinion,  be  practically  the  same.  The 
statute  gives  no  definition.  Its  object,  no  doubt,  was,  first,  to 
assist  the  public  in  obtaining  a practical  highway,  by  enabling 
serious  obstacles  in  the  true  line  to  be  passed  around;  and,  second, 


XXVI.] 


ONTARIO  LAW  REPORTS.  , 


201 


to  make  the  general  provisions  as  to  maintenance,  whereby  the 
burden  is  fairly  apportioned,  apply.  The  question  is  really  more 
one  of  fact  than  of  law.  There  must  have  been  a sufficient  excuse 
in  the  nature  of  the  ground  to  justify  an  abandonment  of  the 
original  line  of  road.  And  it  must  appear  that  the  deviation  was 
intended  to  serve  and  is  serving  the  public  need,  which  would 
have  been  served  if  it  had  been  reasonably  possible  to  open  and 
use  the  original  allowance;  but  its  origin  and  history  are  of  less 
consequence  than  the  facts  existing  when  the  question  arises, 
when  the  main  inquiry  must  be,  is  the  road  now  a public  high- 
way, and  is  it  in  fact  serving  the  public  purposes  which  a road 
upon  the  original  allowance  would  have  served?  Its  direction 
and  its  nearness  to  the  original  line  are,  of  course,  not  to  be  dis- 
regarded, for  a new  road  at  right  angles  could  scarcely  be  called 
a deviation  within  the  meaning  of  the  statute.  But,  while  the 
general  trend  , of  the  new  road  should  be  in  the  direction  of  the 
old,  it  is  not,  I think,  imperatively  necessary  that  the  former 
should  actually  terminate  in  the  latter.  The  statute  does  not 
say  so,  nor,  in  my  opinion,  does  reason,  so  long  as  by  means  of 
some  other  public  road  the  original  line  may  conveniently  be 
reached. 

The  facts  here  seem  to  be  sufficient  to  justify  the  judgment  of 
the  Divisional  Court.  For  over  half  a century  the  public,  in 
passing  and  repassing  along  the  boundary  line  road  so  far  as  it 
was  opened,  have  used  the  new  road,  or  deviation,  to  reach  points 
which  would  have  been  reached  over  the  original  allowance  if 
it  had  been  opened.  And  that  that  was  the  intention  is  also,  I 
think,  established  by  the  circumstance  that  the  county  council, 
before  conveying  the  original  allowance  to  Carroll,  required  a 
report  from  an  engineer,  which  was  furnished,  that  the  new  road 
was  sufficient  for  public  use.  At  that  time,  township  boundary 
lines  were  under  the  jurisdiction  of  county  councils;  and,  if  the 
new  road  was  not  intended  to  be  in  substitution  for  the  old, 
and  therefore  a deviation  within  the  meaning  of  the  statute, 
the  matter  in  no  way  concerned  the  county  council. 

I would  dismiss  the  appeal  with  costs. 

Meredith,  J.A. : — -The  single  question  raised  upon  this  ap- 
peal is,  whether,  for  the  purposes  of  maintenance  and  improve- 


C.  A. 
1912 

County  of 
Wentworth 

v. 

Township 
of  West 
Flam- 
borough. 

Garrow,  J.A. 


14 — XXVI.  O.L.R. 


202 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

County  of 
Wentworth 
v. 

Township 
of  West 
Flam- 
borough. 

Meredith,  J.A. 


ment,  that  part  of  the  public  road  in  question  in  this  action  is 
or  is  not  to  be  declared  part  of  the  town-line  lying  between  the 
townships  of  East  and  West  Flamborough;  it  is  not  upon  the 
original  allowance  for  that  highway;  but,  for  the  plaintiffs,  it  is 
contended  that  it  is  a deviation  from  it  such  as  is  mentioned  in 
the  various  municipal  enactments  and  in  respect  of  which  the 
duty  of  maintenance  and  improvement  attaches  in  the  same 
manner  as  if  it  were  actually  upon  such  an  allowance  for  such 
a road. 


In  considering  such  a question,  regard  must  be  had  to  the 
purposes  of  the  legislation  involved;  and  such  purposes  seem  to 
me  to  contain  the  controlling  influence  in  the  consideration  of 
this  case. 


The  purpose  of  the  legislation  was  to  provide  convenient 
roads  for  those  to  whom  the  Crown  granted  lands  adjacent  to 
them,  as  well  as  for  all  others  who  might  lawfully  use  them; 
and,  in  such  a case  as  this,  the  statute-imposed  obligation  to 
open,  maintain,  and  improve  town-lines,  including  all  such  devia- 
tions, is,  in  very  plain  words,  put  upon  the  adjoining  townships. 

So  that  it  was  the  duty  of  the  defendants,  jointly  with  the 
Township  of  East  Flamborough,  to  open,  maintain,  and  im- 
prove the  town-line  in  question;  but,  by  reason  of  natural  ob- 
structions and  difficulty  in  the  way  of  such  a work,  that  has 
hitherto  been  quite  impracticable;  and  the  law  is  not  unreason- 
able; it  gives  power,  upon  certain  conditions,  to  open  a new  road, 
in  lieu  of  that  laid  down  in  making  the  original  allowance  for 
roads,  and  to  close  it;  and  it  also  provides  for  deviations;  the 
result  of  all  this  seems  to  me  to  leave  the  defendants  in  this  pre- 
dicament: if  that  part  of  the  road  in  question  has  not,  for  the 
purpose  of  maintenance  and  repair,  become  part  of  the  town-line, 
the  defendants  are,  jointly  with  the  other  township,  under  the 
statute-imposed  obligation  to  open,  maintain,  and  improve  it — 
an  alternative  which  they  would  no  doubt  gladly  flee  from,  even 
though  in  so  doing  they  ran  into  that  which  has  been  imposed 
upon  them  in  this  action. 

I can  perceive  no  good  reason  why  that  part  of  the  road  in 
question  may  not  properly  be  deemed  part  of  the  town-line  for 
the  purposes  of  maintenance  and  improvement:  it  is  co-extensive 
only  with  that  part  of  the  original  allowance  which  is  impassable; 


XXVI.] 


ONTARIO  LAW  REPORTS. 


203 


if  the  town-line  had  to  be  opened,  it  was  necessary  that  there 
should  be  either  as  extensive  a deviation,  or  the  expenditure  of 
money  vastly  exceeding  the  amount  required  in  making  such  a 
deviation;  and,  whether  that  is  essential  or  not,  this  deviation 
leads  back  again  to  the  original  allowance,  although  its  main 
purpose — a way  into  the  city  of  Hamilton — is  fulfilled  before  going 
as  far  as  that.  So,  too,  the  main  purpose  of  the  original  allow- 
ance for  road,  if  opened,  would  be  to  give  a way  into  that  city. 

The  piece  of  road  in  question  answers  all  the  purposes  of  a 
deviation;  and  I am  unable  to  perceive  anything  that  materially 
stands  in  the  way  of  that  view  of  the  case;  unless  it  be  that  it 
is  now  not  a deviation,  but  actually  part  of  the  line  by  reason  of 
the  closing  of  it,  where  naturally  impassable,  and  the  adoption 
of  this  piece  in  lieu  of  it;  an  alternative  which  would  not  be 
helpful  to  the  defendants. 

The  trial  Judge  seems  to  me  to  have  taken  quite  too  narrow 
a view  of  that  which  a deviation  may  be. 

I would  dismiss  the  appeal. 

Moss,  C.J.O.,  Maclaken  and  Magee,  JJ.A.,  agreed  that  the 
appeal  should  be  dismissed. 


C.A. 

1912 

County  of 
Wentworth 

v. 

Township 
of  West 
Flam- 
borough. 

Meredith,  J.A. 


Appeal  dismissed  with  costs. 


204 


ONTARIO  LAW  REPORTS. 


'[VOL. 


[IN  THE  COURT  OF  APPEAL.] 


C.  A. 
1912 

April  15 


Clark  v.  Loftus. 

Life  Insurance — Benefit  Certificate — Change  of  Beneficiaries — Person  Bene- 
fiting by  Change — Validity — Onus — Agreement  N not  to  Change — 
Failure  of  Proof — Mental  Capacity  of  Assured — Fraud — Undue  Influ- 
ence— Fiduciary  Relationship. 


The  assured  had  apportioned  the  insurance  moneys  to  arise  from  an 
endowment  certificate  upon  his  life,  among  his  wife  and  two  daughters; 
hut,  while  living  at  the  house  of  one  of  his  daughters,  shortly  before 
his  death,  and  when  he  was  in  a feeble  state,  he  purported,  by  the 
execution  of  a written  instrument,  to  change  the  apportionment  so  as 
to  make  that  daughter  (the  defendant)  the  sole  beneficiary: — 

Held  (Garrow,  J.A.,  dissenting),  that  no  agreement  between  the  assured 
and  his  wife  to  the  effect  that  the  assured  would  make  no  change  in 
the  beneficiaries,  was  proved;  that  the  onus  was  upon  the  plaintiffs 
to  shew  that  the  instrument  changing  the  apportionment  was  invalid 
and  ineffectual,  and  they  had  not  discharged^  that  onus ; and  that  the 
defendant  was  entitled  to  the  insurance  moneys,  subject  to  repayment 
to  the  widow  of  the  assured  of  the  sums  paid  by  her  to  keep  the  certi- 
ficate alive  ( as  agreed  to  by  the  defendant ) . 

Judgment  of  a Divisional  Court,  24  O.L.R.  174,  reversed. 

Per  Moss,  C.J.O. : — The  assured  had  the  right  by  law  to  change  the  nom- 
ination of  beneficiaries  within  the  scope  of  the  certificate;  and,  in  order 
to  avoid  his  act,  it  was  incumbent  upon  those  impeaching  its  effect 
to  shew  mental  incapacity  or  fraud  or  undue  influence,  or  such  a fidu- 
ciary relationship  as  would  shift  the  onus ; and  the  plaintiffs  had 
shewn  none  of  these  things.  The  affirmative  is  not  proved,  because 
the  witness  for  the  negative  is  not  wholly  and  entirely  to  be  believed 
( Nobel’s  Explosives  Co.  v.  Jones  (1881),  17  Ch.D.  721,  739).  The  evi- 
dence failed  to  establish  a want  of  capacity  in  the  assured  to  under- 
stand the  nature  of  the  transaction  or  to  appreciate  its  effect. 

Per  Meredith,  J. A. : —“Righteousness,”  as  applied  to  proof  in  such  cases 
as  Fulton  v.  Andrew  (1875),  L.R.  7 H.L.  448,  means  no  more  than  that 
the  document  propounded  is  really  the  will  of  the  testator:  to  import 
into  the  word  any  such  meaning  as  that  it  must  be  proved  that  the 
will  is  a fair  or  just  one,  or  such  as  a reasonable  man  ought  to  make, 
is  entirely  wrong.  The  onus  shifts;  presumption  of  knowledge  and 
approval  of  the  contents  of  the  will,  from  proof  of  its  due  execution  by 
a competent  testator,  to  whom  the  will  was  read  over,  or  who  has 
read  it,  is  displaced:  actual  knowledge  and  approval  must  be  proved  by 
those  who  take  a benefit  under  it  and  who  have  been  instrumental  in 
making  it;  the  conscience  of  the  Court  must  be  satisfied,  that  is  all. 
The  circumstances  were  not  such  as  to  make  it  necessary  that  the  de- 
ceased should  have  the  advice  of  an  independent  solicitor  when  effect- 
ing the  change  of  beneficiaries.  The  agreement  relied  on  was  not  proved. 
The  wife  could  not  be  a “beneficiary  for  value,”  not  being  expressly 
so  designated  in  the  certificate.  And  the  Courts  below  had  not  found, 
and  there  could  not,  on  the  evidence,  be  a finding  of,  either  want  of 
mental  capacity  or  undue  influence. 

Per  Garrow,  J.A. : — The  substantial  issue  between  the  parties  arose  upon 
the  plaintiffs’  allegation  of  fraud  and  undue  influence  on  the  part  of 
the  defendant  in  procuring  the  assured  to  execute  the  instrument 
effecting  the  change  of  beneficiaries;  and  that  issue,  which  alone  was 
sufficient  to  dispose  of  the  whole  case,  should  be  found  in  favour  of 
the  plaintiffs. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


205 


Appealed  y the  defendant  from  the  judgment  of  a Divisional 
Court,  24  O.L.R.  174. 

January  15.  The  appeal  was  heard  by  Moss,  C.J.O.,  Garrow, 
Maclaren,  Meredith,  and  Magee,  JJ.A. 

G.  H.  Watson,  K.C.,  and  J.  T.  Loftus,  for  the  defendant. 
As  to  the  alleged  agreement  between  the  husband  and  wife 
that  the  apportionment  should  not  be  changed,  it  is  submitted  that 
no  binding  agreement  has  been  proved;  and,  in  any  event,  it  could 
not  be  given  effect  to,  having  in  view  the  amendment  of  sec.  151 
(3)  of  the  Insurance  Act,  R.S.O.  1897,  ch.  203,  by  1 Edw.  VII. 
ch.  21,  sec.  2 (5),  which  provision  must  be  considered  to  be  retro- 
active. This  states  that  no  one  can  be  a beneficiary  for  value 
unless  expressly  so  designated  in  the  certificate.  To  revive  the 
references  to  the  sections  of  the  Act,  reference  is  made  to  R.S.O. 
1897,  ch.  203,  sec.  80,  amended  by  3 Edw.  VII.  ch.  15,  sec.  3 (2); 
R.S.O.  1897,  ch.  203,  sec.  151  (3),  (4),  (5);  sec.  159,  sec.  160  (1), 
(2).  Sub-section  3 of  sec.  151  of  R.S.O.  1897,  ch.  203,  is  amended, 
as  has  been  stated,  by  1 Edw.  VII.  ch.  21,  sec.  2 (5).  Then 
sub-sec.  6 of^sec.  2 of  the  last-mentioned  Act  amended  sub-sec.  2 
of  sec.  160  of  R.S.O.  1897,  ch.  203.  Thus  these  two  sub-sections 
introduce  into  secs.  151  and  160  of  the  Insurance  Act  the  same 
words.  Then  3 Edw.  VII.  ch.  15,  sec.  3 (2),  amends  sec.  80  of 
the  Insurance  Act,  giving  the  beneficiary  the  right  to  sue  in  his 
own  name.  So  that  the  defendant  has  an  absolute  statutory 
right  to  sue  to  recover  these  moneys.  The  plaintiffs  failed  to 
prove  want  of  mental  capacity  on  the  part  of  the  deceased  to 
make  the  change  of  beneficiaries  in  question,  or  that  there  was  any 
fraud  or  undue  influence  exercised  by  the  defendant,  or  that  the 
defendant  stood  in  a fiduciary  position  towards  her  father.  Nor 
has  there  been  any  finding  on  any  of  these  points.  There  was  at 
most  only  vague  suspicion  of  fraud  or  undue  influence.  The 
learned  trial  Judge  erred  in  treating  the  document  of  transfer 
as  a will,  and  applying  to  it  certain  rules  applicable  in  some  cases 
to  testamentary  dispositions.  The  document  was  not  a testa- 
mentary disposition,  and  the  rule  invoked  had  no  application  to  it. 
The  learned  trial  Judge  erroneously  held  that  there  was  an  onus 
cast  upon  the  appellant  herein:  Low  v.  Guthrie,  [1909]  A.C.  278, 
which  modifies  Tyrrell  v.  Painton,  [1894]  P.  151.  The  case  of 


C.  A. 
1912 

Clabk 

v. 

Loftus. 


206 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Clark 

v. 

Loftus. 


Book  v.  Book  (1900-01),  32  O.R.  206,  1 O.L.R.  86,  rather  went 
off  on  the  ground  that  the  beneficiary  did  not  take  as  wife  but  as 
secured  creditor.  Besides,  sec.  151  (3)  was  not  in  force  at  that 
time.  The  onus  was  upon  the  plaintiffs  to  prove  their  case, 
and  in  this  they  have  failed.  The  affirmative  is  not  proved  merely 
because  the  witness  for  the  negative  is  not  wholly  believed:  Nobel’s 
Explosives  Co.  v.  Jones  (1881),  17  Ch.D.  721,  at  p.  739.  There 
was  no  duty  cast  upon  the  defendant  to  advise  her  father  as  to 
the  nature  and  effect  of  his  action  in  altering  the  apportionment. 
The  Court  has  nothing  to  do  with  the  fairness  or  unfairness  of  the 
transaction,  though  that  consideration  seems  to  have  influenced 
one  of  the  learned  Judges  below  in  his  placing  this  case  within 
the  principle  of  Fulton  v.  Andrew  (1875),  L.R.  7 H.L.  348.  The 
change  which  was  made  was  Clark’s  act  and  deed,  and  that  is  all 
which  it  is  necessary  to  shew. 

J.  B.  Clarke , K.C.,  and  E.  J.  Hearn , K.C.,  for  the  plaintiffs. 
At  the  time  he  signed  the  instrument  of  transfer,  Clark  lacked 
the  mental  capacity  to  comprehend  the  nature  of  the  instrument 
or  the  effect  of  what  he  was  doing,  and  the  defendant,  taking 
advantage  of  his  mental  condition,  and  by  the  exercise  of  fraud 
and  undue  influence,  induced  him  to  sign  the  transfer.  Even  if 
competent,  he  was  precluded  from  altering  the  original  nomina- 
tion of  beneficiaries,  by  reason  of  the  agreement  between  himself 
and  the  plaintiff  Jane  Clark  that  he  would  not  make  any  change 
in  the  beneficiaries.  This  agreement  was  made  before  the  passing 
of  the  amendment  to  the  Insurance  Act  (1  Edw.  VII.  ch.  21,  sec. 
2 (5).)  This  amendment  is  not  retrospective,  and  does  not  apply 
to  this  case.  In  any  event,  the  agreement  is  not  within  the  pro- 
visions of  the  Act.  In  the  circumstances  of  this  case,  the  onus 
was  upon  the  defendant  to  shew  that  the  deceased  thoroughly 
understood  what  he  was  doing,  or  at  least  that  he  had  been  pro- 
tected by  independent  advice:  Phillips  v.  Mailings  (1871),  L.R. 
7 Ch.  244;  McCaffrey  v.  McCaffrey  (1891),  18  A.R.  599.  In  view 
of  the  facts  found  by  the  learned  trial  Judge,  the  document  relied 
upon  as  making  a change  of  beneficiaries  ought  not  to  stand : Fulton 
v.  Andrew,  L.R.  7 H.L.  448,  at  p.  471;  Tyrrell  v.  Painton,  [1894] 
P.  151;  Adams  v.  McBeath  (1897),  27  S.C.R.  13;  Collins  v.  Kilroy 
(1901),  1 O.L.R.  503;  Low  v.  Guthrie,  [1909]  A.C.  278;  Malcolm 
v.  Ferguson  (1909),  14  O.W.R.  737,  1 O.W.N.  77;  Kreh  v.  Moses 


XXVI.] 


ONTARIO  LAW  REPORTS. 


207 


(1892),  22  O.R.  307;  In  re  Jansen  (1906),  12  O.L.R.  63;  Milroy 
v.  Lord  (1862),  4 DeG.  F.  & J.  264.  From  the  time  of  making 
the  agreement,  Clark  was  a trustee  of  the  policy  for  the  beneficiaries 
named  therein,  and  the  appellant,  having  knowledge  of  the  agree- 
ment and  taking  the  benefit  of  it,  is  bound  by  its  terms,  and  is  not 
entitled  to  take  any  further  benefit  arising  from  a breach  of  the 
trust  which  she  actively  assisted  in  bringing  about,  and  prepared 
and  witnessed  herself:  Allen  v.  Wentzell  (1909),  7 E.L.R.  575. 
The  certificate,  or  policy,  was  subject  to  the  rules  of  the  Order 
in  respect  to  the  change  of  beneficiaries.  See  rule  150.  We  also 
rely  on  the  reasons  given  in  the  judgments  below. 

Watson,  in  reply.  There  is  the  right  to  transfer  without 
reference  to  the  rules  and  conditions.  See  rule  147 ; also  Mingeaud 
v.  Packer  (1891),  21  O.R.  267,  affirmed  in  (1892),  19  A.R.  290; 
Neilson  v.  Trusts  Corporation  of  Ontario  (1894),  24  O.R.  517; 
Re  Harrison  (1899),  31  O.R.  314.  The  other  side  rests  its  case 
on  suggestions,  suspicions,  and  equities.  There  was  no  fiduciary 
relationship,  and  so  the  doctrine  as  to  necessity  of  independent 
advice  has  no  application:  Wallis  v.  Andrews  (1869),  16  Gr.  624, 
at  p.  641;  McEwan  v.  Milne  (1884),  5 O.R.  100;  Trusts  and 
Guarantee  Co.  v.  Hart  (1901),  2 O.L.R.  251,  affirmed  in  (1902), 
32  S.C.R.  553;  Fisher  v.  Fisher  (1902),  1 O.W.R.  442;  Vandusen 
v.  Young  (1902),  1 O.W.R.  55;  Christian  v.  Poulin  (1902),  1 
O.W.R.  275;  Thorndyke  v.  Thorndyke  (1902),  1 O.W.R.  11. 
The  effect  of  the  statute  since  its  amendment  has  been  considered 
in  several  cases.  See  Re  Murray  (1904),  4 O.W.R.  281;  Lints  v. 
Lints  (1903),  6 O.L.R.  100;  Cartwright  v.  Cartwright  (1906),  12 
O.L.R.  272;  In  re  Cochrane  (1908),  16  O.L.R.  328. 

April  15.  Moss,  C.J.O.: — One  James  E.  Clark,  a member 
of  the  Independent  Order  of  Foresters,  and  the  holder  of  an  en- 
dowment certificate  issued  by  the  Order,  and  dated  the  6th  March, 
1893,  for  the  sum  of  $3,000,  payable  as  in  the  certificate  set  forth, 
died  on  the  16th  February,  1910.  Thereupon  a dispute  arose 
between  the  parties  hereto  as  to  the  right  to  receive  payment  from 
the  Order  of  the  $3,000  in  question.  The  amount,  less  expenses, 
was  paid  into  Court  by  the  Order.  Pursuant  to  an  order  of  Court, 
these  proceedings  were  instituted  for  the  determination  of  the 
question  as  to  which  of  the  parties  was  entitled  to  the  moneys, 


C.  A. 
1912 

Clark 

v. 

Loftus. 


208 

C.  A. 
1912 

Clark 

v. 

Loftus. 

Moss,  C.J.O. 


ONTARIO  LAW  REPORTS.  [vol. 

and,  if  more  than  one  was  entitled,  the  proportions  in  which  they 
were  to  share. 

In  the  certificate  all  three  were  named  as  beneficiaries;  but, 
by  an  instrument  signed  by  him  and  dated  the  29th  November, 
1909,  Clark  designated  the  defendant  Florence  Loftus  as  the  sole 
beneficiary,  reserving  to  himself  the  right  of  revocation  and  sub- 
stitution of  other  beneficiaries  in  accordance  with  the  constitution 
and  laws  of  the  Order.  This  instrument  remained  unrevoked 
at  the  date  of  his  death. 

The  question  for  trial,  therefore,  was  as  to  the  validity  of  this 
instrument.  It  was  not  admitted  by  the  plaintiffs,  but  at  the 
trial  it  was  clearly  proved,  that  the  signature  attached  to  the  in- 
strument was  Clark’s;  and  it  is  not  open  to  question  that,  as  - 
executed  by  him,  it  is  in  form  and  substance  sufficient  to  effect 
the  desired  change  of  beneficiaries. 

But  the  plaintiffs  alleged  that,  at  the  time  he  signed  the  in- 
strument, Clark  was  in  such  a mental  condition  as  to  be  unable  to 
comprehend  the  nature  of  the  instrument  or  the  effect  of  what 
he  was  doing,  and  that  the  defendant,  taking  advantage  of  his 
mental  condition,  and  by  the  exercise  of  fraud  and  undue  influence, 
induced  him  to  sign  the  instrument.  They  further  alleged  that, 
even  if  competent,  he  was  precluded  from  altering  the  original 
nomination  of  beneficiaries,  by  reason  of  an  agreement  between 
him  and  the  plaintiff  Jane  Clark  that  he  would  not  make  any 
change  in  the  beneficiaries. 

The  learned  trial  Judge  held  the  instrument  of  the  29th  No- 
vember, 1909,  to  be  invalid  and  ineffective,  but  chiefly  on  his 
view  as  to  Clark’s  mental  condition  when  he  signed  it  and  as  to 
the  duty  which  he  considered  was  cast  upon  the  defendant  of 
satisfying  the  Court  that  Clark  properly  understood  and  appre- 
ciated the  effect  of  his  act.  He  also  expressed  the  opinion  that  an 
agreement  was  in  fact  made  between  Clark  and  the  plaintiff  Jane 
Clark;  but,  in  view  of  the  amendments  made  to  secs.  151  and  160 
of  the  Ontario  Insurance  Act,  he  rested  his  judgment  principally 
upon  the  other  branches  of  the  case.  In  the  Divisional  Court 
the  judgment  was  affirmed  upon  the  latter  grounds.  Mr.  Justice 
Clute,  by  whom  the  principal  judgment  was  delivered,  held  that, 
in  view  of  the  amendments,  effect  could  not  be  given  to  the  agree- 
ment. The  Chief  Justice  of  the  Common  Pleas  reserved  his 


XXVI.] 


ONTARIO  LAW  REPORTS. 


209 


opinion  as  to  the  effect  of  the  amendments.  Mr.  Justice  Teetzel 
agreed  in  the  result.  So  far,  therefore,  as  expressed  opinions  are 
concerned,  it  may  be  taken  that,  while  it  has  been  found  that  there 
was  an  agreement  in  fact,  it  could  not  avail  to  preclude  Clark 
from  making  the  change  of  beneficiaries.  As  I have  reached  the 
conclusion  that  an  agreement  in  fact  has  not  been  proved,  it  is 
pot  necessary  to  consider  the  effect  of  the  statute  as  amended. 
As  to  what  is  said  to  have  taken  place  between  Clark  and  the 
plaintiff  Jane  Clark  on  this  point,  there  is  no  conflict  of  testimony 
— the  proof  resting  upon  what  was  deposed  to  by  the  two  plaintiffs, 
taken  in  the  light  of  subsequent  conduct  and  events.  Upon  the 
testimony,  I am,  with  deference,  of  the  opinion  that  no  agreement 
is  shewn.  I think  that,  at  the  time  in  the  year  1900  when  it  said 
the  agreement  was  come  to,  there  was  no  bargaining  and  no 
intention  to  bargain  about  the  matter.  It  happened  that  Clark, 
through  losses  in  his  business  and  inability  owing  to  poor  health 
to  earn  any  considerable  income,  concluded  that  he  was  unable 
to  keep  up  the  payments  called  for  by  the  certificate. 

The  matter  appears  to  have  come  up  in  conversation  between 
him  and  the  plaintiff  Jane  Clark,  who  had  separate  means.  In 
her  testimony  in  chief  she  thus  stated  what  took  place:  “Q.  When 
he  failed  in  business  did  he  say  anything  to  you  about  this  insur- 
ance? A.  Yes,  he  came  and  told  me  that  it  was  to  my  benefit 
and  to  the  benefit  of  the  children  to  keep  that  policy  up.  Q. 
What  else  did  he  say?  A.  He  said  that  we  were — as  we  were 
beneficiaries  for  value — Q.  He  said  that  you  were  to  pay  the 
usual  assessments?  A.  Yes.  Q.  And  if  you  did  not,  what 
would  happen?  A.  He  said  it  would  be  a loss  to  me  and  to  the 
children.  Q.  How  would  it  be  a loss  to  you  and  the  children? 
A.  Simply  because  I was  paying  on  it,  and  of  course  he  said  he 
had  no  means  to  pay  it.  . . . Q.  Then  he  said  it  was  for  the 

benefit  of  you  and  the  children?  A.  Yes.  Q.  What  children? 
A.  We  never  made  any  difference  between  Florrie  and  my  own. 
We  were  all  very  agreeable.  Q.  You  were  to  pay  the  usual 
assessments  for  the  benefit  of  yourself  and  the  children?  A.  Yes. 
Q.  Did  you  pay  the  dues  and  assessments  after  that?  A.  I did.” 
On  cross-examination  she  was  asked:  “Q.  What  happened  in 
relation  to  the  insurance?  A.  Well,  he  had  no  money  to  pay  on 
it,  and  I paid  it.  Q.  That  was  all?  A.  Yes;  I paid  it.  Q.  Was 


C.  A. 
1912 

Clark 

v. 

Loftus. 

Moss,  O.J.O. 


210 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Clark 

v. 

Loftus. 

Moss,  C.J.O. 


[VOL. 

there  anything  said?  A . Yes;  he  told  me  it  was  a benefit  for  me 
and  my  children  to  keep  that  policy  paid,  and  I did  so  out  of  my 
own  means.  . . . Q.  But  he  did  not  make  an  agreement  with 

you  or  anything  of  that  kind?  A.  Yes;  he  told  me  that  me  and 
my  daughters  were  beneficiaries,  and  that  it  was  to  my  benefit 
to  keep  the  policy  paid-up  and  for  the  benefit  of  the  children. 
His  Lordship:  Q.  Your  children  included?  A.  Yes.  Mr.  Loftus 
(counsel  for  the  defendant) : Q.  Why  didn’t  you  state  that  before? 

A.  This  is  the  first  time  I have  had  anything  to  do  with  any- 
thing like  this.  That’s  right,  and  Mrs.  Loftus  knows  it  . . . 

Q.  That  is  all  that  was  said?  A.  That  is  all;  he  said  it  was  to 
our  benefit.” 

The  testimony  of  the  other  plaintiff,  though  varying  slightly 
in  terms,  does  not  carry  the  matter  further.  It  is  true  that 
to  the  question  “Was  there  anything  said  about  it?”  she 
answered:  “Yes;  my  father  told  my  mother  in  my  presence 
that  he  had  no  means  since  he  failed,  and  that  it  was  to  her  benefit, 
my  sister’s  and  my  own,  to  pay  that  insurance;  and,  as  he  had 
no  money  to  do  it,  that  she  should  do  so  out  of  her  own  money, 
and  that  she  should  be  benefited  by  it  hereafter,  and  that  it  would 
he  hers.”  But,  in  her  answer  to  the  next  question,  she  shews 
that  it  was  not  her  understanding  that  it  was  to  be  her  mother’s 
any  more  than  any  of  the  others.  Asked,  “Were  you  to  get  any 
benefit  of  it?”  she  answered,  “Yes;  the  understanding  was  that 
we  were  to  share  and  share  alike.”  Now,  making  all  proper 
allowance  for  the  suggested  inexperience  as  a witness  of  the 
plaintiff  Jane  Clark,  which  may  be  considered  as  very  fairly 
offset  by  the  assistance  rendered  by  her  counsel  in  the  form  of 
leading  questions,  I am  unable  to  find  in  this  testimony  the  in- 
gredients of  an  agreement  such  as  has  been  found.  Clark  stated 
what  was  very  probably  true,  that  he  was  unable  to  pay,  and  said 
what  was  obviously  true,  that  it  would  be  to  the  benefit  of  the 
beneficiaries  to  keep  the  certificate  on  foot.  He  put  it  before  his 
wife  as  a matter  for  her  consideration,  but  he  made  no  request 
that  she  should  pay  or  any  stipulation  as  to  what  he  would  do  or 
would  not  do  if  she  continued  the  payments.  That  matter  was 
never  considered  or  discussed  by  them.  She  was  left  free  to  act 
on  his  suggestion  or  advice  or  not  at  her  pleasure.  Whether  as 
a matter  of  fact  some  of  his  means  were  not  employed  in  making 


XXVI.] 


ONTARIO  LAW  REPORTS. 


211 


some  of  the  subsequent  payments  is  by  no  means  clear.  It  is 
shewn  that  he  turned  over  his  earnings  to  his  wife,  and  there  was 
a common  fund.  As  shewing  that  she  knew  that  she  was  not 
bound  to  continue  the  payments  herself,  she  admits  that  she  made 
application  to  the  defendant  to  contribute.  Payments  were 
continued  to  be  made  by  or  through  her  up  to  the  30th  September, 
1908,  when  she  ceased  making  them — and,  but  for  the  subsequent 
payments  being  continued  by  the  defendant,  the  certificate  would, 
in  all  probability,  have  lapsed.  So  far  as  the  plaintiffs  were  con- 
cerned, they  had  abandoned  all  intention  or  desire  to  keep  it  on 
foot  any  longer. 

The  element  of  agreement  should,  I think,  be  entirely  elimin- 
ated from  the  case. 


C.  A. 
1912 

Clark 

v. 

Loftus. 

Moss,  C.J.O- 


Upon  the  other  branches  I am  also  unable  to  agree  to  the  con- 
clusions reached  by  the  trial  Judge  and  the  Divisional  Court. 
These  conclusions  appear  to  me  to  be  based  upon  a misappre- 
hension as  to  the  duties  and  obligations  of  the  defendant  under 
the  circumstances  disclosed  by  the  testimony  and  as  to  the  onus 
of  proof  at  the  trial.  No  doubt,  the  burden  may  shift  from  time 
to  time  during  the  progress  of  the  trial,  and  it  may  be  assumed  that 
in  the  course  of  this  trial  the  onus  varied  from  time  to  time  as  in 
other  cases.  The  question  is,  upon  whom  was  it  resting,  having 
regard  to  the  testimony  given,  at  the  time  when  the  evidence 
closed? 

It  having — as  before  mentioned — been  shewn  beyond  question 
that  the  instrument  impeached  was  signed  by  Clark,  it  is  scarcely 
necessary  to  say  that  the  onus  of  shewing  that  it  was  for  some  rea- 
son or  reasons  invalid  and  ineffectual  was  cast  upon  the  plaintiffs. 

Clark  had  the  right  by  law  to  change  the  nomination  of  bene- 
ficiaries within  the  scope  of  the  certificate,  and  in  order  to  avoid 
his  act  it  was  incumbent  upon  those  impeaching  its  effect  to  shew 
mental  incapacity  unfitting  him  to  execute  the  instrument  with 
knowledge  and  appreciation  of  its  effect,  or  that  he  was  induced  to 
execute  it  through  fraud  or  undue  influence,  or  that  the  defendant, 
in  whose  favour  the  nomination  was  made,  stood  in  a fiduciary 
relationship  towards  her  father,  that  is,  that  she  occupied  such  a 
position  of  trust  and  confidence  in  regard  to  him  as  necessarily 
to  lead  to  the  conclusion  that  she  possessed  a controlling  influence 
over  his  mind  and  actions.  If  the  latter  case  were  established. 


212 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Clark 

v. 

Loftus. 

Moss,  C.J.O. 


[VOL. 


then  the  onus  might  be  cast  upon  her  to  support  the  transaction, 
and  the  question  whether  she  had  satisfactorily  shewn  all  that 
was  required  would  arise,  but  only  in  that  case. 

It  was  not  alleged  nor  was  it  proved  or  found  that  the  de- 
fendant stood  in  a fiduciary  position  towards  her  father.  She  was 
his  daughter,  but  she  was  neither  his  trustee,  guardian,  or  agent. 
There  is  no  evidence  that  at  any  time  during  his  life  had  he  re- 
posed any  special  trust  or  confidence  in  her.  There  existed  be- 
tween them  nothing  but  the  natural  affection  of  father  and 
daughter;  no  relationship  that  called  upon  the  daughter  to  justify 
or  explain  her  father’s  action.  Assuming  capacity  and  the  absence 
of  fraud  or  undue  influence,  the  act  was  one  within  his  right, 
however  unreasonable  or  unjust  towards  others  it  may  appear. 
Apart  from  agreement,  with  which  I have  already  dealt,  Clark 
was  in  no  manner  a trustee  of  the  certificate  or  for  any  of  the 
parties  named  as  beneficiaries;  and  his  act  is  binding  and  con- 
clusive, unless  the  plaintiffs  have  proved  a case  of  mental  in- 
capacity or  fraud  or  undue  influence. 

I have  given  careful  attention  to  the  evidence,  as  well  as  to 
the'  adverse  comments  of  the  learned  trial  Judge  upon  the  tes- 
timony of  some  of  the  witnesses;  and,  after  making  every  allow- 
ance for  the  advantage  which  is  necessarily  enjoyed  by  the  trial 
Judge  from  having  seen  the  witnesses  and  noticed  their  demeanour, 
I am  unable  to  adopt  the  conclusions  arrived  at.  It  may  be  that, 
if  I shared  the  views  of  the  Courts  below  as  to  the  burden  of  proof, 
I should  not  disagree  with  their  findings.  But  if,  as  appears  to 
me,  it  lay  upon  the  plaintiffs  to  prove  their  case,  then,  I think, 
they  failed  to  discharge  the  onus. 

It  has  been  said  more  than  once  that  it  is  a fallacy  to  suppose 
that  the  affirmative  is  proved  because  the  witness  for  the  negative 
is  not  wholly  and  entirely  to  be  believed.  The  affirmative  must 
be  proved;  and  to  say  that  a witness  for  the  negative  is  not 
wholly  to  be  believed  is,  in  no  sense  of  the  word,  to  prove  the 
affirmative:  Nobel’s  Explosives  Co.  v.  Jones,  17  Ch.D.  721,  at  p. 
739. 

The  learned  trial  Judge  was  disposed  to  deal  with  the  question 
of  capacity  as  upon  the  same  footing  as  if  the  act  was  a testamen- 
tary act.  As  the  instrument  was  intended  to  take  effect  in  Clark’s 
lifetime,  it  was  probably  more  in  the  nature  of,  though  not  in  all 


XXVI.] 


ONTARIO  LAW  REPORTS. 


213 


respects  similar  to,  a gift  inter  vivos.  It  differed  from  the  latter 
in  that  it  was  not  absolute  in  effect,  because  of  the  reservation 
of  a power  of  revocation. 

But,  however  regarded,  the  evidence  fails,  in  my  judgment, 
to  establish  a want  of  capacity  to  understand  the  nature  of  the 
transaction  or  to  appreciate  its  effect.  Clark  was,  no  doubt,  in 
poor  health  and  had  been  so  from  the  time  when  he  suffered  from 
an  attack  of  paralysis  in  January,  1909.  According  to  the  tes- 
timony of  the  plaintiff  Jane  Clark,  he  was  then  in  the  hospital 
for  about  three  weeks,  after  which  he  returned  home.  In  April 
he  was  sufficiently  recovered  to  go  to  visit  an  old  friend,  the 
witness  Crompton,  at  his  farm  near  St.  Catharines,  where  he  re- 
mained until  some  time  in  June,  a period  of  about  eight  weeks. 
He  appears  to  have  been  considered  as' of  sufficiently  good  health 
and  capacity  to  take  care  of  himself  to  be  allowed  by  the  plaintiffs 
to  make  the  journey  each  way  unattended.  The  evidence  fails 
to  shew  any  material  failure  in  health  or  mind  between  his  return 
in  June  and  the  signing  of  the  instrument  on  the  29th  November. 
He  appears  to  have  suffered  pains  in  his  head  produced  by  a blow 
from  a trap-door  in  his  factory  falling  upon  him,  and  which  in- 
duced the  first  paralytic  condition.  But  he  went  about  the 
streets  conversing  with  his  neighbours  and  calling  upon  his  daugh- 
ter the  defendant,  without  it  occurring  to  any  one  that  he  should 
be  attended.  The  trivial  incidents  related  by  the  plaintiffs  as 
indicating  mental  weakness  are  wholly  insufficient  to  establish 
want  of  capacity,  or  inability  to  understand  what  he  was  doing 
when  he  signed  the  instrument.  It  was  a single  and  simple  trans- 
action in  connection  with  a certificate  with  the  purport  and  effect 
of  which  he  was  quite  familiar,  for  he  had  considered  and  discussed 
it  on  more  than  one  occasion.  His  signature  appended  to  the 
instrument  compares  quite  favourably  with  that  appended  to  the 
agreement  concerning  the  additional  rates  made  with  the  Order 
in  September,  1908,  and  presents  every  appearance  of  having 
been  written  by  one  quite  capable  of  controlling  his  faculties. 
And  it  is  to  be  noted  that  the  learned  trial  Judge  says  that  he  is 
not  satisfied  that  Clark  had  not  testamentary  capacity. 

Beyond  vague  suspicion,  there  is  really  no  evidence  of  fraud 
or  undue  influence  such  as  is  required  to  be  shewn  in  order  to 
invalidate  such  an  act  as  that  here  impeached.  It  is  important 


C.  A. 
1912 

Clark 

v. 

Loftus. 

Moss,  C.J.O. 


214 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Clark 

v. 

Loftus. 

Moss,  O..T.O. 


to  bear  in  mind  that  there  was  no  secrecy  about  the  matter;  no 
retaining  the  instrument  so  as  to  prevent  scrutiny  and  inquiry. 
It  was  sent  on  to  the  Order  immediately,  and  the  plaintiffs  were 
afforded  opportunities  not  only  of  seeing  the  instrument,  but 
Clark  was  shewn  to  have  visited  the  plaintiffs  from  time  to  time 
afterwards,  and  they  had  every  opportunity  of  ascertaining  whether 
or  not  any  improper  suggestions  had  been  made  to  him  or  his 
mind  otherwise  unduly  influenced.  But,  beyond  endeavouring 
to  induce  the  Order  to  refrain  from  recognising  the  instrument, 
nothing  was  done  or  attempted. 

The  defendant  had  paid  the  arrears  due  in  respect  of  the  cer- 
tificate after  the  plaintiffs  had  abandoned  making  payments, 
and  she  kept  it  on  foot  from  that  time  onwards.  Otherwise  it 
would  have  lapsed  and  have  been  of  no  benefit  to  anybody. 
Having  done  so,  there  was  no  reason  why  her  father  should  not, 
if  he  chose,  put  her  in  the  position  of  sole  beneficiary.  In  doing 
so  he  was  not  bestowing  upon  her  an  extravagant  sum,  and  he 
may  very  justly  have  considered  that,  his  wife  having  considerable 
property  of  her  own  and  having  shewn  no  disposition  to  keep  the 
certificate  on  foot,  his  daughter  by  his  first  marriage,  through 
whose  payments  it  had  been  kept  on  foot,  might  without  unfairness 
receive  the  full  benefit  of  it. 

I would  allow  the  appeal  and  declare  the  defendant  entitled 
to  the  moneys  in  Court,  subject,  however,  to  repayment  to  the 
plaintiff  Jane  Clark  of  the  sums  paid  by  her  in  respect  of  dues  and 
assessments  as  offered  and  agreed  to  by  the  defendant’s  counsel. 

As  to  the  costs,  the  defendant  is  entitled  to  her  general  costs 
of  the  interpleader  proceedings,  of  the  issue,  and  of  the  appeal  to 
the  Divisional  Court  and  to  this  Court. 


Meredith,  J.A. : — 'The  dominating  factor  in  the  conclusions 
reached  in  this  case  hitherto  was  that  which  was  considered  great 
unfairness  in  the  result  of  the  transaction  which  is  in  question 
in  this  action;  had  that  result  been  the  opposite  of  that  which  it 
was,  that  is,  had  it  changed  the  beneficiaries  from  the  one  only 
to  the  three,  no  one  can  doubt  that  it  would  have  been  unhesitat- 
ingly and  firmly  upheld.  It  was  its  want  of  “ righteousness” 
that  caused  its  downfall. 

Mr.  Justice  Clute  seems  to  me  to  have  put  that  very  plainly, 
for  himself  and  as  to  the  trial  Judge.  After  quoting  the  oft- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


215 


quoted  words  expressed  by  Lord  Hatherley  in  the  case  of  Fulton 
v.  Andrew , L.R.  7 H.L.  448,  at  p.  472:  “But  there  is  a further 
onus  upon  those  who  take  for  their  own  benefit,  after  being  in- 
strumental in  preparing  or  obtaining  a will.  They  have  thrown 
upon  them  the  onus  of  shewing  the  righteousness  of  the  trans- 
action;” he  goes  on  to  say:  “The  rule  appears  to  me  to  be  applic- 
able to  a case  of  this  kind,  which  closely  resembles  the  case  of  a 
will.  So  far  from  the  evidence  removing  the  suspicious  nature  of 
the  transaction  and  shewing  the  same  to  be  a righteous  transaction, 
quite  the  reverse  is  the  case.  The  learned  trial  Judge  largely 
discredited  the  evidence  of  the  defence,  and  considered  the  trans- 
action a most  unrighteous  one.” 

So  that  two  things  seem  to  me  to  be  evident:  (1)  that  there 
has  been  a grave  misunderstanding  of  the  meaning  which  Lord 
Hatherley  intended  to  convey  by  the  word  “righteousness;” 
and  (2)  that  this  case  is  not  at  all  like  that  with  which  he  was 
dealing,  or  such  cases  as  Barry  v.  Butlin  (1838),  2 Moo.  P.C.  480, 
or  Tyrrell  v.  Painton,  [1894]  P.  151. 


C.  A. 
1912 

Claek 

V. 

Lofttjs. 

Meredith,  J.A. 


“Righteousness,”  as  applied  to  proof  in  such  cases,  means 
no  more  than  that  the  document  propounded  is  really  the  will  of 
the  testator;  that  it  is  the  duty  of  those  asking  the  Court  to 
pronounce  in  favour  of  the  will,  to  prove  affirmatively  that  the 
testator  knew  and  approved  of  its  contents:  to  import  into  the 
word  any  such  meaning  as  that  it  must  be  proved  that  the  will 
is  a fair  or  just  one,  or  such  as  a reasonable  man  ought  to  make, 
is,  of  course,  entirely  wrong:  a testator  may  be  as  unreasonable, 
unjust,  or  capricious  as  he  pleases,  without  the  Court  having 
any  power  to  control  him;  the  character  of  the  will  may,  of  course, 
afford  evidence  upon  the  question  whether  the  paper  propounded 
is  really  the  testator’s  will;  but  some  care  must  be  taken  fairly 
to  treat  such  things  only  as  evidence;  that  we  do  not  make  them 
an  excuse  for  finding  against  the  validity  of  the  will  really  because 
we  do  not  approve  of  its  contents.  The  man  or  woman  who  makes 
a will  is,  it  may  be,  the  only  one  who  knows  what  is  just  and  fair; 
and,  in  the  absence  of  such  knowledge  as  he  or  she  could  impart, 
one  should  be  very  careful  of  condemning  his  dispositions  of  his 
property. 

On  the  other  point  it  is  not  necessary  to  do  more  than  point 
out  that  this  is  not  the  case  of  a controversy  arising  for  the  first 


216 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Clark 

v. 

Loftls. 

Meredith,  J.A. 


[VOL. 


time  after  a testator’s  death  in  propounding  a writing  as  his  last 
will  and  testament;  the  controversy  arose  in  his  lifetime,  and  was 
carried  on  for  some  time  before  his  death  and  before  his  second 
stroke  of  paralysis,  and  carried  on  by  him,  on  the  one  side,  seeking 
registration  of  his  change  of  beneficiaries,  and  the  respondents, 
on  the  other  side,  opposing  it,  in  the  offices  of  the  friendly  society 
whose  certificate  of  insurance  is  the  subject-matter  of  this  litiga- 
tion. If  there  had  been  any  real  doubt  of  the  man’s  knowledge 
and  approval  of  the  change  he  had  made,  or  of  his  capacity  to 
make  it,  or  that  he  had  duly  signed  the  writing,  all  that  could  at 
once  have  been  set  at  rest,  by  asking  him;  but  that  was  not  done, 
nor  was  any  attempt,  on  the  part  of  the  respondents,  made  to  in- 
vestigate it;  they  knew  that  it  had  been  done,  and  that  they 
could  not  undo  it. 


The  learned  trial  Judge  said,  among  other  things  in  which 
I am  quite  unable  to  agree  with  him,  that  “the  law  calls  upon  the 
person  who  so  takes  to  explain  the  circumstances  in  such  a way  as 
to  remove  all  shadow  of  suspicion  from  the  mind  of  the  Judge  who 
is  called  to  pass  upon  the  case.”  The  rule  is  simply  this:  the 
onus  shifts;  presumption  of  knowledge  and  approval  of  the  con- 
tents of  the  will,  from  proof  of  its  due  execution  by  a competent 
testator,  to  whom  the  will  was  read  over,  or  who  has  read  it, 
is  displaced:  actual  knowledge  and  approval  must  be  proved  by 
those  who  take  a benefit  under  it  and  who  have  been  instrumental 
in  making  it : the  conscience  of  the  Court  must  be  satisfied,  that 
is  all. 


Again,  I am  quite  unable  to  agree  with  him  in  these  obser- 
vations also  contained  in  the  reasons  for  his  judgment:  “The 
situation  was  one  which,  more  than  any  other  situation  one  can 
think  of,  called  for  the  exercise  of  great  precaution.  I think 
it  called  for  Mr.  Clark  receiving  advice  from  an  absolutely  dis- 
interested and  independent  solicitor.”  It  was  but  a single  trans- 
action, of  a very  ordinary  and  simple  character;  the  man  had 
become  dissatisfied  with  his  home,  and  desired  to  change  it,  to 
go  and  live  with  the  only  child  of  his  first  wife.  He  may,  or  may . 
not,  have  had  real  cause  for  that  desire;  that  in  itself  is  not 
material;  he  had,  as  I have  said,  a right  to  be  capricious;  he  had 
a right  to  do  just  as  he  pleased  with  his  own.  His  conduct  was 
not  unique,  it  was  not  even  extremely  uncommon;  as  one  grows 


XXVI.  j 


ONTARIO  LAW  REPORTS. 


217 


old,  the  impressions  of  earlier  days  are  more  vivid  and  attractive 
than  those  of  later  days,  and  one  is  apt  to  become  exacting  and 
more  readily  dissatisfied;  and  there  is  at  least  this  to  be  said  in 
extenuation  of  this  conduct  of  the  man  who  is  not  here  to  justify 
himself,  that  no  great  efforts,  if  indeed  any  efforts,  were  made  to 
dissuade  him  from  going  away  or  to  induce  him  to  remain  or 
return.  He  had  got  to  that  age  and  condition  of  health  that  he 
was,  no  doubt,  more  or  less  a burden  to  those  with  whom  he  lived, 
and  there  can  be  little,  if  any,  doubt  that,  rightly  or  wrongly; 
he  was  impressed  with  the  idea  that  his  wife  thought  so.  I am 
quite  unable  to  perceive  anything  so  complicated  or  extraordinary 
in  the  circumstances  as  to  require  the  services  of  any  solicitor,  or 
what  there  was  in  the  simple  and  single  transaction  that  any  lay- 
man could  not  quite  comprehend.  The  man  knew  that  his  wife 
and  two  children  were  to  share  equally  in  the  money  payable  under 
the  certificate  upon  his  death — if  not  changed;  he  knew  that  he 
wanted  to  change  that  so  that  one  daughter  should  have  all; 
and  that  all  that  was  needed  to  effect  the  change,  could  be  readily 
accomplished  through  the  officers  of  his  “lodge.”  He  knew  also 
that  his  wife  had  property  of  her  own,  of  considerably  greater 
value  than  this  certificate;  and  that  he  had  no  other  property 
which  could  go  to  the  child  of  his  first  wife. 


C.  A. 
1912 

Clark 

V. 

Loftus. 

Meredith,  J.A. 


The  learned  Judge  was  also  emphatic  in  the  opinion  that 
Clark  ought  to  have  been  advised  that  he  was  receding  from  a 
binding  bargain,  made  with  his  wife,  that  the  beneficiaries  of  the 
certificate  should  not  be  changed.  In  that  I am  also  quite  unable 
to  agree,  because:  (1)  no  such  agreement  is  proved;  and  (2),  if 
there  had  been,  there  would  be  no  object  in  advising  him  not  to 
do  a thing  he  had  no  power  to  do.  If  there  were  no  binding 
agreement,  it  was  no  part  of  a solicitor’s  duty  to  advise  him  on 
the  moral  aspect  of  his  conduct;  a solicitor  has  enough  to  do  in 
keeping  his  client  right  in  law. 

That  there  was  no  such  agreement  in  fact  seems  to  me  to 
be  plain  enough.  Notwithstanding  the  controversy  which  arose 
fully  and  sharply  in  the  man’s  lifetime,  there  was  no  assertion 
of  any  such  contract.  In  the  first  statutory  declaration  of  the 
wife,  in  her  opposition  to  the  change  being  made  in  the  society’s 
records,  she  made  no  sort  of  assertion  of  any  such  agreement. 


15 XXVI.  O.L.R. 


218 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Clabk 

V. 

Loftus. 

Meredith,  J.A. 


In  a supplementary  declaration,  made  eight  days  afterwards,  for 
the  sole  purpose  of  making  such  a claim,  she  put  it  in  these  words : — 

“1.  That  when  I began  to  pay  the  assessments  on  the  benefit 
certificate  on  the  life  of  my  husband,  James  Clark,  about  eight 
years  ago,  as  set  forth  in  my  said  former  declaration,  it  was  at  the 
request  of  the  said  James  Clark  that  I did  so,  he  intimating  to 
me  that,  as  my  daughter,  May  Clark,  and  myself  were  two  of  the 
beneficiaries  named  in  the  said  policy,  and  as  he  had  failed  in 
business,  his  membership  in  the  Order  and  the  benefit  certificate 
would  have  to  lapse,  unless  I kept  the  assessments  paid,  and  many 
times  after  that,  through  the  period  of  about  seven  years  that  I 
kept  the  assessments  paid  out  of  my  own  money,  he  frequently 
spoke  to  me,  encouraging  me  to  keep  the  assessments  paid,  and  I 
did  so  with  his  knowledge  and  on  the  understanding  that  myself 
and  my  daughter  May  were  to  be  beneficiaries  for  value  in  the  said 
benefit  certificate. 


“2.  I am  sure  that  my  husband  did  not  expect,  during  that 
period,  that  he  would  be  able  to  change  the  beneficiaries  in  the 
said  policy  from  myself  and  our  daughter,  May  Clark,  without 
my  consent  and  her  consent,  and  I would  not  have  paid  the  said 
assessments  or  any  of  them,  but  for  the  fact  that  she  and  I were 
two  of  the  beneficiaries  named  in  the  said  benefit  certificate. 
And  I now  claim,  as  the  fact  is,  that  she  and  I are  beneficiaries 
for  value,  and  I positively  object  to  any  change  being  made  in  the 
beneficiaries  as  they  stand  in  the  said  benefit  certificate.” 


Not  only  is  no  such  contract  proved,  but,  if  the  case  had  been 
tried  by  a jury,  there  would  have  been  no  reasonable  evidence  to 
submit  to  them  in  support  of  any  claim  that  there  was. 

The  man,  having  been,  obliged  to  give  up  his  business,  and 
his  earning  powers  being  greatly  impaired,  was  unable  to  keep  up 
the  periodical  payments  necessary  to  keep  the  certificate  in  force; 
there  were  then,  practically,  but  two  things  which  might  be  done, 
either  abandon  it,  or  else  make  the  payments  through  the  family 
purse,  to  which  his  wife,  through  the  property  which  she  owned, 
appears  to  have  been  the  chief  contributor  from  that  time  on.  To 
abandon  would  have  been  foolish;  to  keep  up  the  payments  in 
that  way  was  really  the  only  thing  to  be  done;  and  they  all  acted 
accordingly,  until  the  man  left  the  household  and  went  to  live 


XXVI.] 


ONTARIO  LAW  REPORTS. 


219 


with  his  oldest  child,  when  payment  out  of  the  household  purse 
ceased,  and  payment  was  taken  up  by  that  child. 


0.  A. 
1912 


There  is  really  no  sort  of  evidence  of  any  kind  of  a binding 
agreement;  if  there  had  been,  the  wife  broke  it  when  she  ceased 


Clabk 

0. 

Loftus. 


making  payments,  and  contradicted,  if  she  did  not  break,  it,  Meredith,  j.a. 
when  she,  long  before  that,  endeavoured  to  make  the  oldest  child 
contribute  towards  the  payments. 

There  could  have  been  no  contract  unless  the  wife  was  bound 
by  it;  and  how  was  she  in  any  sense  bound?  How  could  she  have 
been  compelled  by  any  one  to  make  the  payments?  Nor  was  it 
suggested,  by  any  of  the  witnesses,  that  the  husband  was  to  retain 
any  separate  legal  right  to  an  interest  in  the  certificate,  or  to 
any  of  the  moneys  which  might  become  payable  under  it;  so  that, 
if  the  wife  had  taken  over  the  insurance,  as  she  now  claims,  it 
would  not  be  for  value;  all  the  payments  which  she  made  would  \ 

be  voluntary  and  for  her  own  benefit  only;  but  that  was  not  the 
character  or  effect  of  the  dealings  between  them;  it  was  merely 
the  case,  and  the  not  uncommon  case,  of  keeping  up  the  payments 
out  of  the  family  purse,  as  I have  said.  There  is  no  suggestion 
by  any  one  that  any  kind  of  provision  was  made  for  the  possibility 
of  the  benefits  of  the  certificate  becoming  available  in  the  man’s 
lifetime;  that  was  never  taken  into  consideration,  as  it  must 
have  been  if  the  parties  were  definitely  contracting  in  regard  to 
the  rights  to  accrue  under  the  certificate.  It  was  simply  the 
common  case  of  the  family  taking  up  the  burden  of  the  payments, 
when  the  head  of  the  house  became  disabled  from  fully  meeting 
them.  The  man  did  not  cease  to  pay,  he  continued  to  pay  all 
that  he  was  able  to  pay;  his  earnings,  though  perhaps  little,  all 
went  into  the  family  purse.  No  attempt  was  made  to  procure 
an  assignment  of  the  certificate  or  of  any  rights  under  it,  nor  was 
anything  of  the  sort  even  suggested,  as  it  doubtless  would  have 
been  if  the  man  were  to  be  precluded  of  all  his  rights  under  it.  It 
was  the  every  day  case  of  trusting  to  the  husband  and  father  not 
to  alter  his  will.  It  is  out  of  the  question  to  speak  of  any  one  as  a 
beneficiary  for  value  of  this  certificate;  such  a contention  is  really 
like  catching  at  a straw  to  save  oneself  from  drowning. 

But,  if  any  one  had  been  meant  to  be  a “ beneficiary  for  value,” 
it  would  be  in  the  teeth  of  the  plainly  and  emphatically  expressed 
intention  of  the  Legislature  that  no  one  can  be  a beneficiary  for 


220 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Clark 

v. 

Loftus. 

Meredith,  J.A. 


value  unless  expressly  so  designated  in  the  certificate;  and  I 
decline  to  attempt  to  dodge  that  enactment  because  I am  carrying 
a hard  case  which  tempts  me  to  do  so.  If  the  man  had  lived  long 
enough  to  become  dissatisfied  with  his  new  home,  and  had  gone 
back  to  his  old  one,  and  had  again  changed  the  beneficiaries, 
back  to  his  wife  and  her  daughter,  a thing  which  might  very  well 
have  happened,  I can  hardly  think  the  other  daughter  would  be 
held  to  be  a beneficiary  for  value,  although  she  took  on,  even, 
a former  understanding  that  if  she  paid  the  premiums  the  benefits 
would  be  altogether  hers. 


There  is  no  finding  of  want  of  mental  capacity,  on  the  part 
of  the  man,  to  make  the  change  of  beneficiaries  in  question;  really 
the  contrary  has  hitherto  been  found,  and  rightly  so.  The  man 
was,  no  doubt,  much  impaired  in  physical  and  mental  vigour; 
it  may  be  that  he  was  not  either  physically  or  mentally  capable 
of  carrying  on  any  trade  or  business,  but  many  an  one  may  be  so 
incapable,  and  yet  capable  of  making  a will;  and  in  this  case  there 
was  unquestionable  mental  and  physical  capacity  to  make,  and 
thoroughly  understand,  the  change  of  beneficiaries  which  he  did 
make — there  can  be  no  doubt  he  knew  the  simple  fact  that  he  was 
taking  from  his  wife  and  his  daughter,  by  her,  one-third  each  of 
the  $3,000  so  paid  under  the  certificate,  and  giving  the  whole  sum 
to  his  only  child  by  a former  wife,  a thing  which,  wise  or  unwise, 
just  or  unjust,  he  was  determined  to  do;  and  there  can  be  no  doubt 
that  when  doing  it  he  knew  that  his  wife  had  property  of  her  own, 
and  that  her  son  and  daughter  were  able  to  earn,  and  were  earning, 
their  own  living;  he  knew  a vast  deal  more  than  we  can  on  the 
subject  of  the  moral  righteousness  or  justness  of  his  act. 

Nor  has  it  been  found  that  there  was  any  undue  influence 
exercised  by  any  one  over  the  man  to  bring  about  the  change; 
indeed,  it  seems  to  be  plain  that  the  intention  originated  in  him- 
self, arising,  in  part,  at  all  events,  in  his  dissatisfaction,  whether 
reasonable  or  unreasonable,  with  his  own  home,  and  in  his  desire 
to  leave  it.  There  was  nothing  like  exclusion  from  intercourse 
with  his  wife  and  her  children  after  he  left  the  household;  he  was 
indeed  a frequent  visitor  there,  according  to  the  wife’s  testimony, 
even  while  the  contest  over  the  change  of  beneficiaries  was  being 
waged  in  the  society: — 

“Q.  You  say  he  went  to  Mrs.  Loftus  in  November.  1908; 


XXVI.] 


ONTARIO  LAW  REPORTS. 


221 


had  he  been  at  your  house  after  that?  A.  Yes,  he  came  over 
next  morning,  and  came  over  every  other  day  for  a week  or  so, 
while  he  was  able  to  go  out. 

“Q.  Up  to  what  date?  A.  I don’t  know,  but  I know  he  came 
over  the  whole  time  he  was  there,  while  he  was  able  to  go  out; 
while  he  was  able  to  walk  from  Mrs.  Loftus’s,  he  came  over  to 
see  me. 


C.  A. 
1912 

Clark 

Loftus. 

Meredith,  J.A. 


“Q.  He  was  able*until  after  New  Year’s;  was  he  over  after 
New  Year’s  to  your  place?  A.  Well,  I cannot  say  whether  he 
was  or  not;  he  was  over,  but  he  had  two  strokes  in  Mrs.  Loftus’s 
house.  I did  not  know  when  he  had  them.  I was  not  notified 
of  them. 

“Q.  Was  he  over  after  the  first  stroke?  A.  Yes,  after  the 
first  stroke  he  had  at  Mrs.  Loftus’s. 

“Q.  That  was  about  the  New  Year?  A.  Then  he  came  over 
after  that.” 

After  the  inability  of  the  trial  Judge — though  so  strongly 
desirous  of  upsetting  the  transaction — to  find  undue  influence, 
and  after  the  inability  of  the  Divisional  Court  to  do  so,  it  would 
be  an  extraordinary  thing  for  this  Court  to  do  so,  even  if  there 
had  been  some  substantial  evidence  of  it,  and  even  if  the  persons 
concerned  were  not  the  reputable  people  the  evidence  shews  them 
to  be. 


If  I were  at  liberty  to  substitute  my  will  for.  that  of  the  dead 
man  in  the  distribution  of  this  money,  I would  very  willingly 
cancel  the  later  “ designation”  and  set  up  the  earlier  one,  in 
accordance  with  my  sense  of  what  would  be  fairer  and  juster,  in 
the  dim  light  *which  the  case  throws  upon  the  knowledge  which 
the  man  had,  and  upon  his  real  and  full  reasons  for  acting  as  he 
did;  but,  as  I have  no  manner  of  doubt  that  the  change  was  made 
by  him  of  his  own  free  will,  I have  no  more  power  to  alter  it,  accord- 
ing to  my  notions  of  moral  right  and  wrong,  than  he,  if  living, 
would  have  to  change  my  will. 

I would  allow  the  appeal  and  give  effect  to  the  change,  which 
was  made  under  the  statute,  and  so  is  not  controlled  by  the  rules 
of  the  society.  According  to  the  practice  of  this  Court,  and,  as 
I understand,  the  consent  of  the  appellant,  the  money  paid  by 
the  respondents  or  any  of  them  in  keeping  the  certificate  in  force, 
with  interest,  should  be  repaid  out  of  the  fund  in  Court. 


222 


ONTARIO  LAW  REPORTS. 


[VOL. 


I have  not  gone  into  the  question,  dealt  with  by  Mr.  Justice 
Clute,  whether  any  such  rule  as  that  involved  in  the  case  of 
Andrew  v.  Fulton  is  applicable  to  such  a case  as  this;  that  is  not 
necessary;  if  the  transaction  were  a contract,  it  would  not  apply; 
if  it  were  a gift  merely,  some  such  rule  might  very  well  be  applied, 
for  after  all  it  comes  down  to  this  simply:  Was  the  act,  mentally 
and  physically,  really  that  of  the  donor? 

Maclaren  and  Magee,  JJ.A.,  agreed  in  allowing  the  appeal. 

Garrow,  J.A.  (dissenting): — Appeal  by  the  defendant  from 
the  judgment  of  a Divisional  Court  affirming  the  judgment  of 
Middleton,  J.,  in  favour  of  the  plaintiffs,  upon  the  trial  of  an  issue 
between  the  parties  as  to  the  ownership  of  certain  money  in  Court, 
the  proceeds  of  a policy  on  the  life  of  the  late  James  E.  Clark. 

James  E.  Clark  was  the  husband  of  the  plaintiff  Jane  Clark, 
his  second  wife,  and  the  father  of  the  plaintiff  May  Clark.  He 
was  also  the  father  of  the  defendant,  by  his  former  wife. 

The  policy,  dated  the  6th  March,  1893,  was  in  the  form  of  an 
endowment  certificate  issued  by  the  Independent  Order  of  For- 
esters, and  the  beneficiaries  therein  named  were  the  plaintiffs 
and  the  defendant  in  equal  shares. 

In  the  month  of  January,  1909,  James  E.  Clark  had  a severe 
stroke  of  paralysis,  from  which  he  never  completely  recovered- 
Up  to  the  month  of  November,  1909,  he  resided  with  his  wife 
and  children,  other  than  the  defendant,  in  a house  owned  by  his 
wife,  but  on  the  22nd  of  that  month  he  left  his  home  and  went  to 
reside  with  the  defendant,  where  he  remained  until  his  death  on 
the  16th  February,  1910.  After  the  stroke,  he  had  been  in  the 
habit  of  going  frequently  to  the  defendant’s  house.  Two  days 
before  he  went  finally  to  reside  with  her,  he  informed  her  of  his 
intention  to  leave  home. 

In  her  evidence  the  defendant  said:  “About  the  20th  of  No- 
vember my  father  came  to  me,  and  he  was  crying;  he  started 
crying  and  said  they  had  another  quarrel  over  home  with  Mrs. 
Clark,  and  that  he  was  not  going  to  stand  her  nonsense  any  longer; 
that,  if  I could  not  take  and  do  anything  for  him,  he  would  go 
into  some  Home,  and  it  was  then  we  first  spoke  about  his  coming 
to  livejwith  me.  He  came  two  days  after  that.” 


C.  A. 
1912 

Clark 

v. 

Loftus. 

Meredith,  J.A. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


223 


On  the  day  that  the  deceased  came  to  live  with  the  defendant, 
steps  were  taken  to  alter  the  apportionment  of  benefit  under  the 
policy  by  giving  it  all  to  the  defendant,  and  a written  document 
to  that  effect  was  prepared  and  executed  by  the  deceased  and  sent 
to  the  insurers,  but  had  not  been  assented  to  by  them  in  his  life- 
time. The  defendant  says  that  the  suggestion  came  first  from 
the  deceased;  but,  even  on  her  own  shewing,  she  seems  to  have 
had  no  compunction  in  accepting  the  change,  and  even  in  assisting 
her  father  to  bring  it  about. 

There  had,  as  the  plaintiffs  contend,  been  an  agreement  be- 
tween the  deceased  and  the  plaintiff  Jane  Clark,  made  several 
years  before  his  death,  that,  if  she  would  keep  up  the  payments 
of  premium  on  the  policy,  the  deceased  would  not  change  the 
apportionment.  And,  in  pursuance  of  this  arrangement,  the 
plaintiff  and  her  daughter  May  had  made  a number  of  payments 
of  premiums.  At  the  time  of  the  first  paralytic  stroke,  there 
were  some  arrears.  These  were,  at  that  time,  paid  by  the  defend- 
ant, who  continued  to  pay  the  premiums  until  her  father’s  death, 
the  total  of  such  payments  amounting  to  about  $82. 

There  was  conflicting  evidence  as  to  the  mental  condition 
and  capacity  of  the  deceased  at  the  time  when  the  document 
changing  the  apportionment  was  executed;  the  witnesses  for  the 
plaintiff  stating  that  he  had  then  become  weak  in  mind,  as  well  as 
in  body,  while  those  of  the  defendant  considered  him  to  be  in  his 
normal  condition,  although  weak  in  body. 

Middleton,  J.,  was  of  the  opinion  that  the  circumstances 
brought  the  case  within  the  rules  as  to  testamentary  dispositions 
procured  or  brought  about  by  a beneficiary,  laid  down  in  such 
cases  as  Barry  v.  Butlin,  2 Moo.  P.C.  480,  and  subsequent  cases; 
that,  from  the  month  of  September  before  his  death,  “the  old  man’s 
mind  was  in  the  extremity  of  weakness,  and  that  he  was  not  fit 
to  exercise  testamentary  powers,  unless  he  had  very  careful 
guidance  to  see  that  all  proper  precautions  were  taken  to  compel 
him  to  realise  the  actual  situation.  . . I am  not  satisfied 

that  he  had  not  testamentary  capacity;  but  I think  it  is  incumbent 
upon  those  attempting  to  set  up  any  testamentary  act  or  any  act 
in  the  nature  of  a testamentary  act  to  see  that  all  extraneous 
influence  was  excluded.”  And  that  he  should  have  received 
advice  from  an  absolutely  disinterested  and  independent  solicitor. 


0.  A. 
1912 

Cl  auk 

V. 

Loftus. 

Garrow,  J.A. 


224 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Clark 

v. 

Loftus. 

Garrow,  J.A. 


The  learned  Judge  also  expressed  dissatisfaction  with  the  explana- 
tion of  the  transaction  in  its  inception  given  by  the  defendant. 
And  he  held  that  the  agreement  between  the  deceased  and  his 
wife  as  to  the  payment  of  premiums  operated  to  prevent  the  de- 
ceased from  changing  the  apportionment. 

In  the  Divisional  Court,  Clute,  J.,  delivered  a judgment  upon 
practically  similar  lines,  agreeing  with  Middleton,  J.;  and  Mere- 
dith, C.J.,  in  a brief  judgment,  said  that  he  agreed  with  Clute, 
J.,  that  the  transaction  was  one  which,  under  the  circumstances, 
could  not  stand,  but  declined  to  express  an  opinion  upon  the  effect 
of  the  agreement  as  to  the  payment  of  premiums  made  between  the 
deceased  and  his  wife.  Teetzel,  J.,  agreed  in  the  result.  If  the 
plaintiffs’  case  rested  solely  upon  the  agreement  said  to  have  been 
made  between  the  deceased  and  his  wife,  I would  have  had  some 
difficulty  in  following  the  conclusion  of  Middleton,  J.  I even 
doubt  whether,  upon  the  whole  evidence,  an  actual  binding  agree- 
ment was  ever  made.  The  impression  which  I gather  from  the 
evidence  is,  that  the  deceased,  finding  himself  unable  to  continue 
to  pay,  simply  turned  the  matter  over  to  his  wife,  advising  her 
that  it  would  be  to  the  advantage  of  the  family  to  keep  up  the 
payments.  This,  which  is,  I think,  something  less  than  a binding 
agreement,  would  explain  the  application  subsequently  made  by 
the  plaintiff  Jane  Clark  to  the  defendant,  to  assist  in  keeping  up 
such  payments,  and  possibly  also  the  fact  that  the  plaintiff  Jane 
Clark  latterly  did  not  keep  them  up.  Nor,  with  deference,  am 
I able  to  agree  that  the  case  can  be  properly  dealt  with  upon  the 
footing  of  a testamentary  disposition  procured  by  the  defendant, 
so  as  to  admit  of  the  application  of  the  rule  as  to  evidence  in  the 
case  of  wills  to  which  Middleton,  J.,  refers. 

The  substantial  issue  between  the  parties,  it  seems  to  me, 
arises  upon  the  plaintiffs’  allegation  of  fraud  and  undue  influence 
on  the  part  of  the  defendant  in  obtaining  from  the  deceased  the 
execution  of  the  document  in  question.  And  upon  that  issue, 
which  is  alone  quite  sufficient  to  dispose  of  the  whole  case,  I would 
without  hesitation  find  in  favour  of  the  plaintiffs. 

The  learned  trial  Judge  found  as  a fact,  upon  conflicting  evi- 
dence, that  at  the  time  of  the  transaction  the  deceased  was  of 
weak  mind. 

No  consideration  was  paid  or  agreed  to  be  paid  by  the  de- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


225 


fendant  for  the  transfer.  She  knew  her  father’s  condition  and 
circumstances,  and  also  that  the  policy  had  been  kept  alive  by  the 
plaintiffs,  and  must,  therefore,  have  known  that  what,  as  she 
alleges,  he  proposed  to  do  was  at  least  unfair,  and  even  dishonest, 
as  against  them.  He  came  to  the  defendant,  having  left  his  own 
home  without  any  sufficient  cause;  and  steps  were  immediately 
taken,  not  to  heal  the  breach,  but  to  obtain  the  transfer  now  under 
attack.  Under  these  circumstances,  the  defendant  was,  I think, 
bound  to  shew  by  satisfactory  evidence,  that  the  deceased  thor- 
oughly understood  what  he  was  doing,  or  at  all  events  that  he 
had  been  protected  by  independent  advice:  see  Phillips  v.  Mul- 
lings,  L.R.  7 Ch.  244,  at  p.  246;  McCaffrey  v.  McCaffrey , 18  A.R. 
599. 

Middleton,  J.,  who  saw  the  witnesses,  has  expressed  his  dis- 
satisfaction with  the  explanatory  testimony  adduced  by  the 
defendant  concerning  the  transaction;  and  it  is  not  even  pre- 
tended that  there  was  independent  advice. 

Under  these  circumstances,  the  transaction  in  question  is 
one  which,  in  my  opinion,  cannot  be  supported;  and  the  appeal 
should  be  dismissed  with  costs. 

Appeal  allowed;  Garrow,  J.A.,  dissenting. 


[IN  THE  COURT  OF  APPEAL.] 

Re  City  of  Toronto  and  Toronto  R.W.  Co. 

Street  Railways — Interchange  of  Traffic — Ontario  Railway  Act,  1906,  sec. 
57(6) — Application  of — Order  of  Ontario  Railway  and  Municipal 
Board — Jurisdiction — Municipal  Corporation — Railways  not  yet  Con- 
structed. 

An  order  made  by  the  Ontario  Railway  and  Municipal  Board,  determin- 
ing, ordering,  and  declaring  that  sec.  57  of  the  Ontario  Railway  Act, 
1906,  should  apply  to  the  Toronto  Railway  Company  and  to  the  rail- 
ways owned  and  operated  by  that  company,  and  to  the  Corporation  of 
the  City  of  Toronto  and  the  street  railways  to  be  constructed  by  that 
corporation,  was  held  to  be  beyond  the  powers  of  the  Board. 

Per  Moss,  C.  J.O. : — The  question  turns  upon  the  proper  view  to  be  taken 
of  sub-sec.  (6)  of  sec.  57,  read  in  connection  with  and  in  the  light  otf 
the  other  portions  of  the  section.  Under  sub-sec.  (4)  the  powers  of  the 
Board  arise  only  when  there  has  been  inability  to  agree  upon  the 
matters  there  specified.  And  these  powers  are  confined  to  determining 
in  respect  of  these  matters.  Sub-section  (6)  enables  the  Board  to  deal 
with  street  railways,  but  does  not  say  that  it  is  to  do  so  under  cir- 
cumstances different  from  those  under  which  they  deal  with  steam 
railways,  by  virtue  of  sub-sec.  (4).  There  is  no  warrant  for  such  a wide 
departure  from  the  manifest  object  and  scope  of  the  section  as  to 
adapt  it  to  a case  where  there  are  not  two  existing  and  operating  lines 
before  the  Board,  upon  application  made  by  one  or  more  of  the  parties 
interested. 


C.  A. 
1912 

Clark 

17. 

Loftus. 

Garrow,  J.A. 


C.  A. 
1912 

April  15 


226 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.A. 

1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 


Per  Meredith,  J.A.: — Reading  the  whole  section  together,  and  having 
due  regard  to  the  purpose  of  the  Legislature,  gathered  from  the  whole 
Act,  sub-sec.  (-6)  applies  only  to  interchange  between  existing  street 
railways. 

Per  Magee,  J.A. : — The  word  “company,”  as  used  in  sec.  57,  does  not  in- 
clude a municipality;  and  a municipality  is  not  liable  under  sec.  57 
to  be  compelled  to  interchange  traffic  with  any  street  railway  or  other 
railway  company;  and,  therefore,  that  part  of  the  order  of  the  Board 
which  dealt  with  the  city  corporation  and  the  railways  to  be  constructed 
by  that  corporation,  was  not  within  the  powers  of  the  Board.  The 
order  with  respect  to  the  company’s  railways  would,  if  it  stood  alone, 
be  quite  within  the  powers  of  the  Board;  yet,  being  made  upon  a non- 
existent basis,  and  with  a view  to  an  impossible  result,  and  made 
without  consideration  of  its  effect  upon  the  company  with  regard  to 
any  other  railway  or  street  railway,  it  was  not  warranted  in  law 
and  should  be  declared  invalid. 


By  an  order  made  by  the  Court  of  Appeal  on  the  17th  Novem- 
ber, 1911,  the  Toronto  Railway  Company  were  allowed  to  appeal 
to  that  Court  from  an  order  made  by  the  Ontario  Railway  and 
Municipal  Board  on  the  24th  June,  1911. 

The  order  of  the  Board  was  made  upon  the  application  of  the 
Corporation  of  the  City  of  Toronto,  which  application  was  as 
follows : — 

“The  applicant  hereby  makes  application  for  an  order  of  the 
Ontario  Railway  and  Municipal  Board,  directing  and  ordering 
the  respondent  to  afford  all  proper  and  reasonable  facilities  for 
the  receiving  and  forwarding  of  passenger  traffic  upon  and  from 
the  several  railways  belonging  to  the  respondent,  and  those  to 
be  constructed  by  the  applicant  upon  St.  Clair  avenue  and 
Gerrard  street,  in  the  city  of  Toronto;  and  providing  for  the 
return  of  cars,  motors,  and  other  equipment  belonging  to  either 
the  applicant  or  the  respondent,  and  used  for  the  purpose  of 
receiving  or  forwarding  such  traffic,  so  as  to  afford  all  passengers 
on  the  cars  of  the  municipal  system  passage  over  the  tracks  of 
the  respondent  company  as  a continuous  line  of  communication 
without  unreasonable  delay  and  without  prejudice  or  disadvan- 
tage in  any  respect  whatsoever,  and  so  that  no  obstruction  may 
be  offered  in  the  use  of  the  Toronto  Railway  system  and  lines 
to  be  laid  by  the  applicant  as  a continuous  line  of  communica- 
tion, and  so  that  all  reasonable  accommodation  may  at  all  times 
be  mutually  afforded  by  and  to  the  said  applicant  and  the  said 
respondent. 

“And  for  an  order  that  the  respondent  company  and  its  rail- 
way system  shall  be  subject  to  and  governed  by  the  provisions 
of  sec.  57  of  the  Ontario  Railway  Act,  1906.” 


XXVI.] 


ONTARIO  LAW  REPORTS. 


227 


The  order  made  by  the  Board  was  as  follows: — 

“1.  This  Board  determines,  orders,  and  declares  that  sec- 
tion 57  of  the  Ontario  Railway  Act,  1906,  shall  apply  to  the 
Toronto  Railway  Company  and  the  street  railways  owned  and 
operated  by  the  said  company. 

“2.  This  Board  further  determines,  orders,  and  declares  that 
section  57  of  the  Ontario  Railway  Act,  1906,  shall  apply  to  the 
Corporation  of  the  City  of  Toronto  and  the  street  railways  to 
be  constructed  by  it.” 

Section  57  of  the  Ontario  Railway  Act,  1906,  6 Edw.  VII. 
ch.  30,  is  as  follows: — 

57. — (1)  The  directors  of  any  railway  company  may  at  any 
time,  and  from  time  to  time,  make  and  enter  into  any  agreement 
or  arrangement  with  any  other  company,  either  in  this  Province 
or  elsewhere,  for  the  regulation  and  interchange  of  traffic  passing 
to  and  from  the  railways  of  the  said  companies,  and  for  the 
working  of  the  traffic  over  the  said  railways  respectively,  or  for 
either  of  those  objects  separately,  and  for  the  division  and  ap- 
appointment  of  tolls,  rates  and  charges  in  respect  of  such  traffic, 
and  generally  in  relation  to  the  management  and  working  of  the 
railways,  or  any  of  them,  or  any  part  thereof,  and  of  any  rail- 
way in  connection  therewith,  for  any  term  not  exceeding  twenty- 
one  years,  and  to  provide,  either  by  proxy  or  otherwise,  for  the 
appointment  of  a joint  committee  or  committees  for  the  better 
carrying  into  effect  such  agreement  or  arrangement,  with  such 
powers  and  functions  as  may  be  considered  necessary  or  ex- 
pedient, subject  to  the  consent  of  two-thirds  of  the  shareholders, 
voting  in  person  or  by  proxy. 

(2)  Every  railway  company  shall,  according  to  their  respec- 
tive powers,  afford  all  reasonable  facilities  to  any  other  railway 
company  for  the  receiving  and  forwarding  and  delivering  of 
traffic  upon  and  from  the  several  railways  belonging  to  or  worked 
by  such  companies  respectively,  and  for  the  return  of  carriages, 
trucks,  and  other  vehicles;  and  no  such  company  shall  give  or 
continue  any  preference  or  advantage  to  or  in  favour  of  any  par- 
ticular company,  or  any  particular  description  of  traffic,  in  any 
respect  whatsoever,  nor  shall  such  company  subject  any  par- 
ticular company  or  any  particular  description  of  traffic  to  any 
prejudice  or  disadvantage  in  any  respect  whatsoever;  and  every 


C.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 


228 


ONTARIO  LAW  REPORTS. 


a a. 

1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 


[VOL. 


railway  company  having  or  working  a railway  which  forms  part 
of  a continuous  line  of  railway,  or  which  intersects  any  other 
railway  or  which  has  a terminus,  station  or  wharf  of  the  one  near 
a terminus,  station  or  wharf  of  the  other,  shall  afford  all  due 
and  reasonable  facilities  for  receiving  and  forwarding  by  the  one 
of  such  railways,  all  the  traffic  arriving  by  the  other,  without 
any  unreasonable  delay  and  without  any  such  preference  or 
advantage,  or  prejudice  or  disadvantage  as  aforesaid,  and  so 
that  no  obstruction  may  be  offered  in  the  using  of  such  railway 
as  a continuous  line  of  communication,  and  so  that  all  reasonable 
accommodation  may  at  all  times,  by  the  means  aforesaid,  be 
mutually  afforded  by  and  to  the  said  several  railway  companies. 

(3)  If  any  officer,  servant  or  agent  of  a railway  company, 
having  the  superintendence  of  the  traffic  at  any  station  or  depot 
thereof,  refuses  or  neglects  to  receive,  convey  or  deliver  at  any 
station  or  depot  of  the  company  for  which  they  may  be  destined, 
any  passenger,  goods  or  things,  brought,  conveyed  or  delivered 
to  him  or  to  such  company,  for  conveyance  over  or  along  the 
railway  from  that  of  any  other  company,  intersecting  or  coming 
near  to  such  first-mentioned  railway,  or  in  any  way  wilfully 
contravenes  the  provisions  of  the  next  preceding  sub-section — 
such  first-mentioned  railway  company,  or  such  officer,  servant 
or  agent,  personally,  shall,  for  every  such  neglect  or  refusal,  incur 
a penalty  not  exceeding  $50  over  and  above  the  actual  damages 
sustained. 

(4)  In  case  any  company  or  municipality  interested  is  unable 
to  agree  as  to  the  regulation  and  interchange  of  traffic  or  in 
respect  of  any  other  matter  in  this  section  provided  for,  the 
same  shall  be  determined  by  the  Board. 

(5)  All  complaints  made  under  this  section  shall  be  heard  and 
determined  by  the  Board. 

(6)  This  section  shall  apply  to  such  street  railways  as  may 
from  time  to  time  be  determined  by  the  Board. 

January  22.  The  appeal  was  heard  by  Moss,  C.J.O., 
Garrow,  Maclaren,  Meredith,  and  Magee,  JJ.A. 

H.  S.  Osier,  K.C.,  for  the  appellants,  argued  that  the  Board 
had  no  power  under  sec.  57  (6)  of  the  Ontario  Railway  Act  to 
make  the  order  in  question.  The  language  of  the  Act  could  only 
refer  to  railways  in  existence,  and  was  not  intended  to  enable 


XXVI.] 


ONTARIO  LAW  REPORTS. 


229 


a corporation  desirous  of  building  a railway  to  ascertain  in  ad- 
vance the  terms  upon  which  it  could  interchange  traffic  with 
an  existing  railway.  The  statute  shews  that  the  Board  must 
have  all  the  facts  before  it  before  making  such  an  order,  and 
the  necessary  evidence  has  not  been  obtained  in  the  present  case. 

H.  L.  Drayton,  K.C.,  and  G.  A.  Urquhart,  for  the  respondents, 
argued  that  the  question  at  issue  was  merely  an  academic  one, 
as  the  city’s  railways  would  soon  be  finished.  The  jurisdiction 
of  the  Board  to  make  the  order  appealed  against  is  plain  under 
sec.  57  (6)  of  the  Act,  and  the  appellants  are  not  entitled  to  rely 
on  the  absence  of  evidence  which  they  could  have  supplied  at 
the  hearing,  if  they  had  desired  to  do  so. 

Osier,  in  reply,  argued  that  the  question  was  not  merely 
academic;  and,  even  if  it  were,  the  statute  should  not  be  con- 
strued in  the  way  suggested  by  the  respondents,  in  the  absence  of 
clear  and  specific  words  to  the  effect  contended  for. 

April  15.  Moss,  C.J.O.: — In  the  view  which  I take  of  the 
question  raised  by  this  appeal,  it  is  not  necessary  to  discuss  or 
consider  at  length  many  of  the  arguments  which  were  forcibly 
presented  against  and  in  support  of  the  order  appealed  from. 

As  a practical  operative  order,  it  works  no  substantial  advan- 
tage to  the  city  and  it  imposes  no  real  disadvantage  upon  the 
company.  It  settles  nothing  of  a practical  nature,  and,  as  a 
declaratory  order,  does  nothing  towards  making  effective  the 
provisions  of  sec.  57  of  the  Ontario  Railway  Act,  6 Edw.  VII. 
ch.  30,  as  between  the  parties  hereto. 

Whether,  if  the  Board  had  the  power  to  issue  the  order,  it 
rightly  exercised  it,  is  a question  with  which  we  have  no  con- 
cern. It  is  right  to  assume  that,  when  its  power  to  determine 
is  invoked,  the  Board  will  not  undertake  to  determine  without 
having  first  informed  itself  of  all  the  existing  conditions, 
and  considered  whether  the  circumstances  shewn  make  it  just 
and  proper  to  put  the  provisions  of  the  section  into  effect  as 
between  the  street  railways  then  before  it. 

The  question  of  power  turns,  as  it  appears  to  me,  upon  the 
proper  view  to  be  taken  of  sub-sec.  (6)  of  sec.  57  of  the  Railway 
Act,  read,  of  course,  in  connection  with  and  in  the  light  of  the 
otherjportions  of  the  section. 


0.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 


230 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 

Moss,  C.J.O. 


I am  unable  to  satisfy  myself  that  in  this  case  the  circum- 
stances had  arisen  which,  upon  a careful  study  of  the  section, 
I think  must  occur  before  the  power  under  sub-sec.  (6)  is  called 
into  action. 

It  is,  of  course,  undeniable  that  primarily  the  provisions  of 
the  section  deal  only  with  steam  railways,  and  are  intended  to 
govern  the  regulation  and  interchange  of  traffic  between  trans- 
portation agencies  of  that  character.  And  it  is  also  quite  plain 
that  the  legislation  contemplates  existing  operating  companies 
actually  engaged  in  carrying  traffic,  which  includes,  no  doubt, 
passengers,  as  well  as  goods.  Thus  sub-sec.  (1),  providing  for 
agreements  between  companies  speaks  of  “traffic  passing  to  and 
from  the  railways  of  the  said  companies,”  of  “the  working  of 
the  traffic  over  the  said  railways,”  of  “the  division  and  appor- 
tionment of  tolls,  rates  and  charges  in  respect  of  such  traffic,” 
and  of  “the  appointment  of  a joint  committee  or  committees  for 
the  better  carrying  into  effect  such  agreement.”  So,  too,  sub- 
sec. (2),  imposing  upon  a company  an  obligation  to  afford  facili- 
ties to  other  companies,  speaks  of  “the  receiving  and  forwarding 
and  delivering  of  traffic,”  of  “the  return  of  carriages,  trucks, 
and  other  vehicles,”  of  a company  “having  or  working  a railway 
which  forms  part  of  a continuous  line  of  railway,  or  which  inter- 
sects any  other  railway,”  of  the  duty  of  such  a company  to 
“afford  all  due  and  reasonable  facilities  for  receiving  and  for- 
warding by  the  one  of  such  railways,  all  the  traffic  arriving  by 
the  other.”  Again,  sub-sec.  (3),  dealing  with  penalties,  speaks  of 
refusal  or  neglect  “to  receive,  convey  or  deliver  at  any  station 
or  depot  of  the  company  for  which  they  may  be  destined,  any 
passenger,  goods  or  things,  brought,  conveyed  or  delivered  . . . 
for  conveyance  over  or  along  the  railway  from  that  of  any  other 
company,  intersecting  or  coming  near  to  such  first-mentioned 
railway.” 

All  these  point  plainly  and  unmistakably,  not  to  projected 
or  contemplated  railways,  but  to  railways  actively  engaged  in 
the  business  of  conveying  passengers  and  goods  upon  and  over 
their  lines.  It  is  only  when  they  are  found  in  that  condition 
that  they  can  be  usefully  rendered  available  for  carrying  out  the 
objects  aimed  at. 

Sub-section  (4)  brings  the  Board  into  requisition  where  there 


XXVI.] 


ONTARIO  LAW  REPORTS. 


231 


is  a failure  or  inability  to  agree  as  to  the  regulation  and  inter- 
change of  traffic  or  any  other  of  the  matters  provided  for,  and 
empowers  it  to  determine  upon  an  agreement  according  to  the 
terms  of  which  the  mutual  services  prescribed  by  the  previous 
portions  of  the  section  shall  be  performed  by  the  parties  interested. 

But,  before  the  Board’s  powers  can  come  into  play,  it  must 
find,  and  be  prepared  to  deal  with,  a case  of  (a)  at  least  two 
existing  operating  companies,  engaged  in  receiving,  forwarding, 
and  delivering  traffic  with  railways  forming  parts  of  a continuous 
line  or  intersecting  each  other  or  having  termini,  stations,  or  wharves 
near  to  each  other;  in  fine,  operating  and  carrying  on  the  busi- 
ness of  transportation  of  passengers  or  freight  or  both  under 
the  circumstances  detailed  in  the  preceding  portion  of  the  sec- 
tion; and  (b)  inability  to  agree  as  to  the  regulation  and  inter- 
change of  traffic  or  in  respect  to  the  other  matters  provided  for. 

Now,  is  there  anything  in  sub-sec.  (6)  to  shew  that  in  the 
case  of  street  railways  there  is  to  be  any  different  mode  of  treating 
the  matter? 

It  says  “this  section,”  that  is,  the  preceding  provisions  of  the 
section,  “shall  apply  to  such  street  railways  as  may  from  time 
to  time  be  determined  by  the  Board.”  Is  it  intended  by  this 
enactment  to  do  more  than  to  apply  the  provisions  of  the  sec- 
tion to  street  railways  which  the  Board  shall  find  holding  towards 
each  other,  relatively  at  least,  the  same  position  as  steam  rail- 
ways? That  it  was  not  so  intended  seems  to  be  manifest  from 
the  language.  Under  sub-sec.  (4)  the  powers  of  the  Board  arise 
only  when  there  has  been  inability  to  agree  upon  the  matters 
there  specified.  And  these  powers  are  confined  to  determining 
in  respect  of  these  matters.  Sub-section  (6)  enables  the  Board 
to  deal  with  street  railways,  but  does  not  say  that  it  is  to  do  so 
under  circumstances  different  from  those  under  which  they  deal 
with  steam  railways,  by  virtue  of  sub-sec.  (4).  In  other  words, 
the  Board,  when  it  finds  two  or  more  existing  operating  street 
railways  before  it,  upon  application  made  by  one  or  more  of  the 
parties  interested,  is  to  determine  whether,  as  regards  the  street 
railways  before  it,  there  is  a case  proper  for  intervention  under 
sub-sec.  (4).  It  may  be  that  the  Board  should  have  regard, 
upon  such  an  application,  to  the  differences  in  methods  of  trans- 
port and  the  conduct  of  business  between  the  two  systems;  but 


0.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 


Moss,  C.J.O. 


232 


ONTARIO  LAW  REPORTS. 


[VOL. 


0.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 

Moss,  C.J.O. 


there  does  not  appear  to  be  any  warrant  for  such  a wide  departure 
from  the  manifest  object  and  scope  of  the  section  as  to  adapt  it 
to  a case  where  there  are  not  two  existing  and  operating  lines 
before  the  Board  upon  the  application. 

The  application  is  intended  to  result  in  something  practical 
in  the  form  of  an  order  determining  the  terms  and  conditions 
upon  which  the  regulation  or  interchange  of  traffic  is  to  take 
place.  There  is  no  indication  anywhere  that  the  Board  is  to 
deal  with  any  but  a state  of  circumstances  outlined  in  sub- 
sec. (4). 

For  these  reasons,  I think  that,  under  the  then  existing  cir- 
cumstances, the  order  made  was  not  within  the  SGope  of  the 
Board’s  powers  under  sec.  57,  and  that  it  should  not  stand. 

The  appeal  should  be  allowed,  with  the  usual  result  as  to 
costs. 


Garrow  and  Maclaren,  JJ.A.,  concurred. 

Meredith,  J.A. : — The  main  part  of  the  respondents’  applica- 
tion to  the  Board  makes  manifest  its  premature  character;  it  is 
in  these  words: — 

“The  applicant  hereby  makes  application  for  an  order  of  the 
Ontario  Railway  and  Municipal  Board,  directing  and  ordering 
the  respondent  to  afford  all  proper  and  reasonable  facilities  for 
the  receiving  and  forwarding  of  passenger  traffic  upon  and  from 
the  several  railways  belonging  to  the  respondent,  and  those  to 
be  constructed  by  the  applicant  upon  St.  Clair  avenue  and  Gerrard 
street,  in  the  city  of  Toronto;  and  providing  for  the  return  of 
cars,  motors,  and  other  equipment  belonging  to  either  the  appli- 
cant or  the  respondent,  and  used  for  the  purpose  of  receiving  or 
forwarding  such  traffic,  so  as  to  afford  all  passengers  on  the  cars 
of  the  municipal  system  passage  over  the  tracks  of  the  respondent 
company  as  a continuous  line  of  communication  without  un- 
reasonable delay  and  without  prejudice  or  disadvantage  in  any 
respect  whatsoever,  and  so  that  no  obstruction  may  be  offered 
in  the  use  of  the  Toronto  Railway  system  and  lines  to  be  laid  by 
the  applicant  as  a continuous  line  of  communication,  and  so 
that  all  reasonable  accommodation  may  at  all  times  be  mutually 
afforded  by  and  to  the  said  applicant  and  the  said  respondent.” 


XXVI.] 


ONTARIO  LAW  REPORTS. 


233 


To  an  ordinary  mind  it  must  seem  extraordinary,  at  the  least, 
for  any  one  to  apply  for  an  interchange  of  passenger  traffic,  cars, 
motors,  and  other  equipment,  not  only  without  having  any  to 
interchange,  but  without  having  even  a railway  to  run  them 
over;  indeed,  so  extraordinary  that,  although  the  Board  was 
plainly  anxious  to  aid  the  applicant  all  it  could,  this  part  of  the 
application  is  not  even  adverted  to  in  the  formal  order  made  by 
it  upon  the  application. 

The  earlier  provisions  of  the  enactment  in  question — the 
Railway  Act,  sec.  57 — make  it  clear  to  me,  upon  their  face,  that 
they  relate  only  to  existing  railways.  The  agreement  which  rail- 
way companies  may  make  is  for  the  “ interchange  of  traffic  passing 
to  and  from  the  railways”  of  such  companies:  evidently  existing 
railways  capable  of  actually  making  such  an  interchange;  and 
in  practice  almost  necessarily  so.  Then  every  railway  company 
is  to  afford  reasonable  facilities  to  any  other  railway  company 
for  receiving,  forwarding,  and  delivering  traffic  upon  and  from 
the  several  railways  belonging  to  or  worked  by  such  railway 
companies  respectively;  again,  existing  railways,  of  course.  And 
then  a penalty  is  provided  for  refusal  or  neglect  to  forward  traffic 
over,  necessarily,  an  existing  railway. 

All  this  seems  to  be  so  plain,  and  so,  for  practical  purposes, 
necessary,  that  there  was  little,  if  any,  controversy  over  it:  but 
it  was  urged,  for  the  respondents,  that,  under  sub-sec.  (6)  of 
sec.  57,  the  Board  had  power  to  determine  that  that  section 
should  apply  to  the  appellants’  railway:  Mr.  Drayton  seemed 
to  take  refuge  in  this  last  ditch;  but, If  or  several  reasons,  in  my 
opinion,  he  cannot  hold  it:  in  the  first  place,  the  order  in  ques- 
tion was  not  made  upon  the  Board’s  own  motion,  but  was  based 
entirely  upon  the  respondents’  application,  upon  which  they  can 
take  nothing  and  which  they  had  no  power  to  make;  and,  there- 
fore, the  order  was  made  without  jurisdiction:  in  the  second 
place,  the  Board  had  no  intention  to  make,  and  did  not  make, 
any  such  order;  its  order  was  intended  to  embrace,  and  does 
in  terms  embrace,  both  parties  to  the  application  and  the  rail- 
way of  the  one  and  the  proposed  railway  of  the  other:  to  strike 
out  that  part  of  the  order  which  relates  to  the  respondents,  and 
their  proposed  railway,  and  to  let  the  rest  stand,  would  be  to  make 
a new,  and  different,  order,  of  a very  different  character  and 


C.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 

Meredith,  J.A. 


16 — XXVI.  O.L.R. 


234 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 

Meredith,  J.A. 


effect,  from  that  intended  to  be  made,  and  actually  made,  by 
the  Board;  and  one  which,  I can  hardly  think,  they  would  have 
thought  of  making;  and  which,  if  they  had  made  it,  could  not, 
in  my  opinion,  stand.  The  purpose  of  the  Board  was  to  make 
provision  so  that  there  should  be  an  interchange  of  traffic  be- 
tween the  railway  of  the  appellants  and  that  of  the  respondents, 
when  it  comes  into  existence;  and  that  alone  was  the  purpose 
of  the  application  to  them  by  the  respondents.  Take  away  the 
order  against  the  respondents,  and  what  remains  is  something 
never  contemplated  by  the  parties  or  the  Board,  and  which, 
I should  imagine,  no  one  desires.  It  would  give  the  prospective 
railway  of  the  respondents  nothing:  they  would  be  obliged  to 
apply  again  to  the  Board  when  they  have  a real  railway,  not 
merely  power  to  build  it;  whilst  the  effect  upon  the  appellants 
and  their  railway  would  be  this,  that  they  would  be  bound  to 
interchange  traffic,  including  carriage  trucks  and  other  vehicles, 
with  every  “ steam’ ’ railway  under  the  legislative  power  of  the 
Legislative  Assembly;  and  also  with  any  other  street  railway, 
municipal  or  otherwise,  which  the  Board  might  see  fit  to  bring 
into  the  provisions  of  sec.  57,  or  which  is  already  within  them, 
under  sub-sec.  (6);  that  is,  of  course,  if  the  Board’s  power  be  as 
wide  under  that  sub-section  as  the  respondents  contend  for;  but, 
lastly,  its  power  under  that  sub-section  is,  in  my  opinion,  much 
narrower  than  that,  and  does  not  extend  to  the  making  of  an 
unlimited  order  of  that  character.  Reading  the  whole  section 
together,  and  having  due  regard  to  the  purpose  of  the  Legis- 
lature, gathered  from  the  whole  Act,  sub-sec.  (6)  applies  only 
to  interchange  between  existing  street  railways:  it  does  not 
authorise  the  making  of  an  omnibus  order  against  any  street 
railway  company,  putting  upon  it  an  obligation  to  interchange 
with  every  sort  of  a railway  under  provincial  legislative  power, 
with  the  limitation  only  that,  as  to  other  street  railways,  an 
omnibus  order  shall  be  made  respecting  %them.  The  very  nature 
of  the  thing  seems  to  me  to  require  that  the  order  shall  be  limited 
to  two  or  more  definite  existing  railways,  to  be  made  only  after 
a consideration  of  the  particular  case  in  the  public  interests,  as 
well  as  of  the  interests  of  the  companies  directly  concerned. 
The  respondents  cannot  want — indeed,  it  would  be  obviously 
against  their  interests  to  want-*-the  appellants’  railway  thrown 


XXVI.] 


ONTARIO  LAW  REPORTS. 


235 


open  to  others  and  not  to  them:  their  need  is,  interchange  be- 
tween their  railway  when  built  and  that  of  the  appellants,  but 
only  if  that  can  be  beneficially  accomplished;  and  they  ought 
not,  merely  to  save  themselves  from  the  position  of  having  failed 
altogether  in  their  application,  to  catch  at  and  try  to  hold  on  to 
something  that  does  them  no  good,  but  harm,  as  well  as  grievously 
and  needlessly  hampering  the  appellants’  already  overloaded 
railway.  It  is  quite  true  that  the  applicants  ought  not  to  be 
delayed  until  the  last  spike  of  their  construction  is  driven;  but, 
on  the  other  hand,  it  is.  at  least  equally  plain  that  they  ought  not 
to  begin  their  application  before  the  first  spike  is  driven;  it  can 
hardly  be  that  even  the  first  spike  constitutes  a “ railway.”  The 
pitiful  picture  painted  by  the  Chairman,  of  waste  in  the  dupli- 
cating of  works,  is  almost,  if  not  altogether,  a fanciful  one  only; 
and  one  which,  if  there  really  could  be  anything  in  it,  would  not 
be  got  rid  of,  or  even  ameliorated,  by  the  order  in  question, 
which  gives  nothing  to  the  respondents;  until  the  final  agree- 
ment, or  order,  for  interchange,  should  be  made,  there  would 
be  just  as  much  uncertainty  as  there  is  now;  an  uncertainty 
which  cannot  really  affect  materially,  if  in  any  way,  the  mode 
of  construction  of  the  proposed  railway. 

A much  more  real  picture  of  that  character  might  be  drawn 
from  a study  of  the  effect  of  an  unlimited  order  adding  to  the 
burden  of  already  overcrowded  cars,  and  overburdened  rails, 
complaint,  inconvenience,  and  bad  feeling,  as  well  as  to  the 
danger  to  life  and  limb  which  that  burden  already  carries. 

There  is  obviously  a vast  difference,  in  this  respect,  between 
“steam”  railways  and  street  railways;  to  the  former,  with  their 
comparatively  infrequent  trains  and  the  matter  of  merely  attach- 
ing other  cars  to  them,  the  freest  interchange  is,  generally  speak- 
ing, manifestly  in  the  public  interests,  as  well  as  in  the  interests 
of  all  else  concerned;  between  street  railways,  with  already  over- 
crowded rails,  as  well  as  cars,  cars  which  are  run  separately,  and 
when  it  may  be  practically  necessary  to  send  not  only  the  car 
but  also  the  crews  of  the  one  company  over  the  lines  of  the  others, 
a very  different,  and  a much  more  difficult,  problem  arises,  and 
one  which  can  be  fairly  dealt  with  only  when  the  railways  are 
in  existence  and  after  the  most  careful  consideration  of  all  the 
then  existing  circunstances — circumstances  which  are  changing, 


0.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 

Meredith,  J.A. 


236 


ONTARIO  LAW  REPORTS. 


[VOL. 


0.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 

Meredith,  J.A. 


in  some  respects,  from  time  to  time,  and  with  especial  regard  to 
lesening  rather  than  running  any  risk  of  increasing  the  already  ter- 
rible toll  of  lost  life  and  limb  in  street  railway  accidents. 

I can  have  no  manner  of  doubt  that,  if  the  position  of  the 
parties  were  reversed,  if  the  municipality  were  the  owners  and 
operators  of  the  central  system,  and  some  private  corporation 
were  projecting  the  outlying  railway,  this  particular  application 
would  be  generally  scoffed  at. 

I am  in  favour  of  allowing  the  appeal,  and  discharging  the 
order  in  question  altogether. 


Magee,  J.A.: — The  by-law  and  orders  of  the  Ontario  Rail- 
way and  Municipal  Board  under  which  the  City  of  Toronto  Cor- 
poration is  acting  were  not  before  us  on  the  argument,  but  were 
before  that  Board,  or  at  least  within  its  cognizance  upon  the 
city  corporation’s  application  for  the  order  now  in  appeal.  A 
copy  of  by-law  No.  5626,  which  will  be  referred  to,  has  since  been 
put  in,  and  also  a copy  of  the  opinion  of  the  Board,  dated  the 
23rd  June,  1911,  approving  of  the  plans  and  profiles  submitted 
by  the  city  as  to  car  lines  on  Gerrard  street  and  Coxwell  avenue 
and  on  St.  Clair  avenue. 


The  appellants,  the  Toronto  Railway  Company,  own  and 
operate  the  street  railway  within  what  was  formerly  the  city  of 
Toronto,  but  new  territory  has  since  been  added  to  the  city,  and 
the  proposed  street  railways  of  the  city  or  some  of  them  are  to 
be  within  the  new  territory. 

As  a municipal  corporation,  the  city  would  be  enabled  under 
sec.  569  of  the  Consolidated  Municipal  Act,  1903  (as  amended 
in  1906  by  6 Edw.  VII.  ch.  34,  sec.  21,  and  in  1910  by  10  Edw. 
VII.  ch.  81,  sec.  4),  to  pass,  with  the  assent  of  the  electors,  a by- 
law for  building,  equipping,  maintaining,  and  operating  street 
railways  along  such  streets  and  subject  to  and  upon  such  terms 
as  the  Lieutenant-Governor  in  Council  might  approve,  and  for 
leasing  the  same  from  time  to  time,  and  for  levying  an  annual 
special  rate  to  defray  the  interest  and  principal  of  the  expendi- 
ture. No  other  statutory  authority  is  referred  to  as  empowering 
the  city  to  construct  or  operate  a street  railway.  By  the  Ontario 
Railway  and  Municipal  Board  Act,  1906,  6 Edw.  VII.  ch.  31, 
sec.  53,  that  Board  is  given  the  powers  of  the  Lieutenant-Governor 


XXVI.] 


ONTARIO  LAW  REPORTS. 


237 


in  Council  as  to  approval  or  confirmation  of  such  by-laws.  By 
the  Ontario  Railway  Amendment  Act,  1910  (10  Edw.  VII.  ch. 
81,  sec.  3),  a railway  company  shall  not,  without  first  obtaining 
the  permission  of  the  Board,  begin  the  construction  of  a railway 
upon  a highway,  and  this  shall  apply  to  a street  railway;  and  by 
the  Ontario  Railway  Act,  1906  (6  Edw.  VII.  ch.  30),  sec.  2 (21), 
a “street  railway”  is  declared  to  mean  a railway  constructed 
or  operated  along  a highway  under  or  by  virtue  of  an  agreement 
with  or  by-law  of  a city  or  town.  Thus  the  Board’s  approval  of 
the  by-law  (or  that  of  the  Lieutenant-Governor  in  Council)  would 
be  necessary,  and  also  the  Board’s  permission,  before  beginning 
the  construction  on  the  streets. 

A by-law  was  passed  by  the  city  council  with  a view  to  the 
construction  of  some  street  railway  lines.  In  the  Board’s  reasons 
for  the  order,  of  the  24th  June,  1911,  now  in  appeal,  it  is  stated 
that  “the  city  submitted  a by-law  to  the  ratepayers  to  authorise 
the  issue  of  debentures  to  the  amount  of  $1,157,293,  to  pay  for 
the  construction  and  equipment  of  street  railways  upon  certain 
streets  to  be  selected  by  the  council,  with  the  approval  of  this 
Board.  The  by-law  was  carried  by  an  overwhelming  majority.” 
The  Board  then  goes  on  to  state:  “On  the  25th  April  last,  the 
city  made  an  application  to  the  Board  for  the  approval  of  the 
plans  for  the  construction  of  the  civic  car  lines  on  Gerrard  street 
and  Coxwell  avenue  from  Greenwood  avenue  to  Main  street, 
and  on  St.  Clair  avenue  from  Yonge  street  to  the  Grand  Trunk 
Railway  crossing.  The  Board,  in  an  opinion  dated  the  6th  May, 
1911,  declined  to  approve  the  plans  and  profiles  until  the  city 
furnished  us  with  particulars  of  the  whole  scheme  for  building, 
equipping,  maintaining,  and  operating  the  civic  car  lines.  We 
stated  in  that  opinion  that  we  required  to  know  all  the  streets 
the  city  intended  to  use  for  the  lines,  the  mileage,  the  kind  of 
rail,  the  character  of  the  construction,  kind  of  car  barns  and 
repair  shops,  the  number  and  kind  of  cars  to  be  operated,  and 
an  estimate  of  the  cost  of  construction,  operation,  and  main- 
tenance, and  of  the  revenue  to  be  derived  from  the  enterprise. 
The  city  have  complied  with  this  demand  of  the  Board,  and 
have  furnished  us  with  the  required  particulars  and  details  of 
the  scheme.  The  Board  have  approved  of  the  plans  and  pro-  * 
files  and  of  the  scheme  generally.  We  are  informed  that  the 


0.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 

Magee,  J.A. 


238 

C.  A. 
1912 

Re 

City  of 
Toronto 

AND 

Toronto 
R.W.  Co. 

Magee,  J.A. 


ONTARIO  LAW  REPORTS.  [vol. 

city  have  ordered  the  rails  and  other  material  necessary  for  the 
construction  of  the  lines.” 

We  find  in  the  statutes  of  1911  (1  Geo.  V.  ch.  119,  sec.  8) 
that  a city  by-law  No.  5626,  passed  on  the  23rd  January,  1911, 
for  the  raising  of  $1,157,293,  the  amount  mentioned  by  the  Board, 
was  declared  valid. 

In  the  letter  of  the  5th  May,  1911,  to  the  company’s  manager, 
counsel  for  the  city  stated:  “As  you  know,  the  different  routes 
under  contemplation  by  the  city,  and  for  which  the  by-law  has 
been  passed  by  the  people,  are  as  follows:  (1)  St.  Clair  avenue 
(2)  Davenport  road  and  Bathurst  street 
(3)  Rosedale  loop  ...  (4)  Danforth  avenue  . . . (5) 

Gerrard  and  Main  street.  . . .”  The  letter  goes  on  to  state 

the  estimated  cost  of  constructing  a double  track  with  an  80  lb. 
rail  on  each  of  these  routes. 

So  far  as  appears,  by-law  No.  5626  is  the  only  by-law  passed. 
It  recites  that  by  a report  of  the  board  of  control,  adopted  in 
council,  “ it  is  recommended  that  a by-law  should  be  passed  to  pro- 
vide for  the  issue  of  debentures  to  the  amount  of  $1,157,293  for  the 
purpose  of  building  and  equipping  street  railways,  and  of  laying 
permanent  pavements  upon  the  railway  portions  upon  certain 
streets  of  the  city;”  and  that  the  council  had  determined  to  issue 
debentures  to  that  amount,  “for  the  purpose  of  raising  the  amount 
required  to  pay  for  the  construction  and  equipment  of  street  rail- 
ways upon  certain  streets  to  be  selected  by  the  council,  with  the 
approval  of  the  Ontario  Railway  and  Municipal  Board,  in  those 
parts  of  the  city  annexed  thereto  since  September,  1891,  and  for  the 
laying  down  of  permanent  pavements  upon  the  railway  portions  of 
such  streets.”  The  by-law  then  authorised  the  issue  and  sale  of  the 
debentures,  “and  the  proceeds  thereof  . . . shall  be  applied 

for  the  purposes  above  specified,  and  for  no  other  purpose.” 

It  would  thus  appear  that  the  by-law  does  not  specify  any  street 
for  the  railway,  but  leaves  that  to  future  selection  by  the  council. 
The  issue  of  debentures  is  made  valid  by  the  statute,  and  no 
objection  is  taken  here  as  to  the  validity  or  sufficiency  of  the  by- 
law otherwise,  or  to  the  right  of  the  city  to  proceed  with  the 
construction  and  operation  of  the  proposed  lines.  Objection  is 
made,  however,  that  the  mere  right  to  construct,  and  even  an 
authorised  plan  for  construction,  does  not  suffice  for  the  applica- 
tion now  in  question. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


239 


On  the  5th  June,  1911,  the  city  gave  the  company  notice  of 
the  application  out  of  which  this  appeal  arises,  and  the  applica- 
tion was  heard  on  the  21st  June.  No  evidence  was  offered  be- 
yond putting  in  some  letters  which  had  passed  between  the 
parties,  each  inviting  proposals  from  the  other. 

The  permission  of  the  Board  for  the  construction  had  not 
been  given  when  the  application  was  heard.  The  information 
which  the  Board  had  required  was  received  by  it  only  on  the 
previous  day,  the  20th  June,  and  the  company’s  counsel  was  not 
aware  that  it  had  been  furnished.  The  Board’s  approval  is  dated 
the  23rd  June.  The  order  appealed  from,  though  not  dated, 
is  stated  to  have  been  made  on  the  24th  June. 

The  city  notified  the  company  of  its  intention  to  apply  to  the 
Board  for  two  things:  an  order  to  the  company  to  afford  all 
proper  facilities  for  what  may  be  called  interchange  of  passenger 
traffic  and  cars  between  the  company’s  street  railway  and  two 
of  the  city’s  lines,  namely,  those  on  St.  Clair  avenue  and  Gerrard 
street;  and  an  order  that  the  company  and  their  railway  system 
shall  be  subject  to  and  governed  by  the  provisions  of  sec.  57  of 
the  Ontario  Railway  Act,  1906.  The  Board  did  not  grant  the 
application  for  an  order  for  interchange.  It  was  hardly  asked 
for,  but  recognised  as  premature,  and  indeed  asserted  by  the 
city  to  be  a matter  for  subsequent  action.  But  the  Board  did 
make  an  order  declaring  that  sec.  57  should  apply  to  the  company 
and  its  street  railways,  and  also  declaring  that  it  should  apply 
to  the  city  corporation  “and  the  street  railways  to  be  constructed 
by  it.”  The  latter  declaration  had  not  been  specifically  asked 
for. 

The  company  appeal,  on  the  ground  that  the  Board  had  no 
jurisdiction  to  make  such  an  order  against  them,  at  the  instance 
of  the  city,  or  with  a view  to  interchange  with  the  non-existent 
city  railways. 

The  Ontario  Railway  Act,  1906  (6  Edw.  VII.  ch.  30),  in  sec. 
3,  incorporates  the  Act  with  the  special  Act,  and  declares  that  it 
applies  to  “all  persons,  companies,  railways  (other  than  Govern- 
ment railways)  and  (when  so  expressed)  to  street  railways  within 
the  legislative  authority  of  the  Legislature  of  Ontario;”  but  no 
section  of  the  Act  shall  “apply  to  street  railways  unless  it  is  so 
expressed  and  provided.”  Section  5 is  to  the  like  effect. 


C.  A. 
1912 

Re 

City  of 
Toronto 

AND 

Toronto 
R.W.  Co. 

Magee,  J.A. 


240 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 

Magee,  J.A. 


Section  57,  in  sub-sec.  (1),  provides  that  “the  directors  of  any 
railway  company  may  at  any  time,  and  from  time  to  time,  make 
and  enter ' into  any  agreement  or  arrangement  with  any  other 
company,  either  in  this  Province  or  elsewhere,  for  the  regula- 
tion and  interchange  of  traffic  passing  to  and  from  the  railways 
of  the  said  companies,  and  for  the  working  of  the  traffic  over 
the  said  railways  respectively,  or  for  either  of  those  objects 
. for  any  term  not  exceeding  twenty-one  years,”  and 
to  “provide  . . . for  the  appointment  of  a joint  committee 

or  committees  for  the  better  carrying  into  effect  such  agreement 
or  arrangement  . . . subject  to  the  consent  of  two-thirds 

of  the  shareholders,  voting  in  person  or  by  proxy.”  Sub-section 
(2)  provides  that  “every  railway  company  shall  . . afford 

all  reasonable  facilities  to  any  other  railway  company  for  the 
receiving  and  forwarding  and  delivering  of  traffic  upon  and  from 
the  several  railways  belonging  to  or  worked  by  such  companies 
respectively,  and  for  the  return  of  carriages,  trucks,  and  other 
vehicles;”  and  no  such  company  is  to  give  any  preference  or 
advantage  to  any  particular  company  or  description  of  traffic, 
or  subject  any  to  prejudice  or  disadvantage;  and  “every  rail- 
way company  having  or  working  a railway  which  forms  part 
of  a continuous  line  of  railway,  or  which  intersects  any  other 
railway  or  which  has  a terminus,  station  or  wharf  of  the  one  near 
a terminus,  station  or  wharf  of  the  other,”  shall  afford  facilities 
for  receiving  and  forwarding  by  the  one  all  the  traffic  arriving 
by  the  other  and  so  that  no  obstruction  may  be  offered  “in  the 
using  of  such  railway  as  a continuous  line  of  communication.” 
Sub-section  (3)  imposes  penalties  on  the  employees  of  a “rail- 
way company”  refusing  or  neglecting  to  receive,  convey,  or  de- 
liver traffic  from  the  railway  of  “any  other  company.”  Sub- 
section (4)  declares  that  “in  case  any  company  or  municipality 
interested  is  unable  to  agree  as  to  the  regulation  and  interchange 
of  traffic  or  in  respect  of  any  other  matter  in  this  section  provided 
for,  the  same  shall  be  determined  by  the  Board.”  And  sub-sec. 
(5)  reads:  “All  complaints  made  under  this  section  shall  be  heard 
and  determined  by  the  Board.”  If  the  section  stopped  there,  it 
would  not  apply  to  street  railways.  But  sub-sec.  (6)  is  added, 
which  declares  that  ‘ This  section  shall  apply  to  such  street  rail- 
ways as  may  from  time  to  time  be  determined  by  the  Board.” 


XXVI.] 


ONTARIO  LAW  REPORTS. 


241 


The  word  “company,”  in  the  expressions  “any  railway  com- 
pany,” “every  railway  company,”  and  “any  other  railway  com- 
pany,” used  in  sec.  57,  is  not,  I think,  governed  by  the  inter- 
pretation given  in  sec.  2 to  the  expression  “the  company,”  and 
should,  therefore,  be  interpreted  in  its  natural  sense,  and  would 
not  include  a municipal  corporation.  And,  as  only  companies 
are  mentioned,  it  could  not  be  intended  that  municipalities  or 
their  railways  could  be  made  subject  to  it.  But  then,  it  may 
be  said,  that,  under  sec.  569  of  the  Municipal  Act,  the  munici- 
pality has  the  same  rights,  powers,  and  liabilities  as  street  rail- 
ways and  companies  (which  must  mean  all,  not  some,  of  such 
railways  and  companies)  under  the  Street  Railway  Act  (R.S.O. 
1897,  ch.  208),  which  is  now  replaced  and  repealed  by  the  Ontario 
Railway  Act,  1906.  By  the  Interpretation  Act,  R.S.O.  1897, 
ch.  1,  sec.  8 (now  7 Edw.  VII.  ch.  2,  sec.  7),  the  sections  of  the 
Ontario  Railway  Act,  1906,  corresponding  to  those  of  the  Street 
Railway  Act,  would  be  applicable.  In  the  Street  Railway  Act 
and  the  amendments  before  1906,  there  was  no  provision  requiring 
interchange,  though  there  was  a right  to  agree  to  interchange. 
Section  57,  apart  from  sub-sec.  (6) , does  not  relate  to  street  rail- 
ways at  all,  and  even  with  sub-sec.  (6)  does  not  relate  to  all 
but  only  to  some  street  railways — perhaps  to  none  in  the  Province 
other  than  these  two.  It  cannot  then  be  said  that  sec.  569  makes 
interchange  a right  or  liability  of  the  municipality.  The  only 
view  in  which  it  might  be  claimed  that  the  municipality  would 
be  made  subject  to  sec.  57  is,  that  it  is  subject  to  the  jurisdiction 
of  the  Board,  and  liable  to  have  an  order  made  by  the  Board 
under  that  section — but  that  is  not,  I think,  in  any  sense,  one 
of  the  “liabilities”  contemplated  by  sec.  569.  I am,  therefore, 
of  opinion  that  a municipality  is  not  liable  under  sec.  57,  any 
more  than  a Government  railway,  to  be  compelled  to  interchange 
traffic  with  any  street  railway  or  other  railway  company.  I may 
here  add  that  the  use  of  the  word  “municipality”  in  sub-sec.  (4) 
does  not  help  a contrary  view;  it  is  manifestly  used  in  respect 
of  rights  other  than  as  proprietors  of  a railway,  and  its  use  there, 
as  contradistinguished  from  “company,”  when  it  is  not  used 
elsewhere  in  the  section,  rather  supports  the  view  that  “company” 
does  not  include  “municipality.” 

It  is  noticeable  that  sub-sec.  (6)  of  sec.  57  uses  the  words  “street 


C.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 

Magee,  J.A. 


242 


ONTARIO  LAW  REPORTS. 


C.  A. 
1912 

Re 

City  of 
Toronto 

AND 

Toronto 
R.W.  Co. 

Magee,  J.A. 


[VOL. 


railways.”  “Street  railway”  is  defined  in  sec.  2 (21)  as  meaning 
a railway  “constructed  or  operated”  along  a highway,  as  already 
mentioned.  Had  sub-sec.  (6)  used  the  words  “the  company,” 
they  are  defined  as  meaning  “the  company  or  person”  (which 
would,  under  the  Interpretation  Act,  include  “corporation”) 
“authorised  by  the  special  Act  to  construct.”  The  city’s  street 
railway  is  authorised,  but  it  is  not  yet  commenced,  much  less 
constructed  or  operated.  But,  as  the  interchange  of  traffic  could 
not  take  place  till  constructed  and  operated,  I do  not  see  that 
the  Board  must  wait  until  that  stage  before  making  the  declara- 
tion that  sec.  57  shall  apply  to  it,  when  constructed  and  operated. 
As  pithily  put  by  the  Board,  “that  the  proposed  civic  lines  will 
be  built  is  as  certain  as  taxes.”  The  Board  do  not  make  such 
a declaration  in  the  dark.  As  appears  from  the  quotation  above 
made  from  their  reasons,  they  know  the  routes  and  the  gauge, 
and  sufficient  particulars  to  enable  them  to  judge  whether  it  is 
proper  that  a particular  street  railway  should  be  made  liable  to 
interchange  at  all.  The  Legislature  has  constituted  the  Board 
for  the  very  purpose  of  exercising  its  discretion,  and  it  is  not  to 
be  assumed  that  the  Board  would  in  any  case  act  in  the  dark  or 
without  full  information  on  all  points  necessary  for  arriving  at 
a decision.  The  liability  to  interchange  is  one  thing,  the  terms 
of  the  interchange  another. 

I have  been  dealing  with  the  question  of  the  power  of  the 
Board  to  determine  that  the  city  or  its  street  railway  shall  be  sub- 
ject to  sec.  57.  That  it  has  such  power  with  regard  to  the  street 
railway  of  the  appellant  company  is  not  disputed.  That  power 
it  may  exercise  of  its  own  motion  or  on  the  application  of  any 
one  interested,  and,  under  sec.  17  of  the  Ontario  Railway  and 
Municipal  Board  Act,  it  can  decide  conclusively  who  is  a party 
interested;  and  I do  not  see  anything  in  the  Act  to  prevent  the 
city  corporation,  owning  or  not  owning  a street  railway,  or  a Board 
of  Trade,  or  a body  of  merchants,  or  an  individual,  from  being 
considered  by  the  Board  to  be  a party  interested  sufficiently  to 
set  the  Board  in  motion  if  the  Board  did  not  choose  to  take  action 
itself. 

Wejthen  come  to  consider  the  order  appealed  from.  It  is 
in  fact  two  orders  combined  in  one.  It  is  not  an  order  that 
sec.  57^shall  apply  as  between  these  two  street  railways,  or^shall 


XXVI.] 


ONTARIO  LAW  REPORTS. 


243 


apply  to  each  as  regards  the  other.  It  contains  an  absolute  and 
unlimited  declaration  that  the  section  shall  apply  to  the  com- 
pany and  its  street  railway.  And  then  it  contains  an  equally 
absolute  and  unlimited  declaration  as  to  the  city  and  the  “street 
railways  to  be  constructed  by  it.”  It  is  not  restricted  to  those 
coterminous  with  the  company’s  railway  nor  to  those  on  St. 
Clair  avenue  and  Gerrard  street,  nor  even  to  those  to  be  con- 
structed under  the  existing  by-law;  but  this  appeal  has  no  con- 
cern with  any  objection  on  that  score.  The  effect  is  that,  if 
sec.  57  is  to  apply  to  the  company,  it  applies  to  it  not  merely  to 
require  interchange  with  the  city’s  street  railway,  but  with  all 
street  railways,  if  not  all  railways  of  any  sort  to  which  sec.  57 
from  time  to  time  applies. 


C.  A. 
1912 

Re 

City  of 
Toronto 
and 

Toronto 
R.W.  Co. 

Magee,  J.A. 


That  brings  us  again  to  consider  sub-sec.  6.  Several  meanings 
may  be  put  forward  for  it.  One  is  that  the  Board  may  apply  sec. 
57  not  to  one  or  more  specified  street  railways,  but  to  a class  or 
to  such  as  answer  certain  requirements.  This  order  would  not 
comply  with  that  interpretation.  Another  meaning  might  be 
argued  for — that  the  Board  could  apply  sec.  57  not  to  any  one  or 
more  certain  specified  street  railways,  but  only  as  between  two  or 
more  specified  street  railways — so  that,  in  fact,  it  would  not 
wholly  apply  to  any  one  of  them — that  is,  it  would  not  apply  to 
it  as  regards  railways  not  mentioned.  This  order  does  not  com- 
ply with  that  meaning. 

Then  the  only  remaining  construction,  and  the  one  which  is, 
in  my  opinion,  the  correct  one,  is,  that  the  Board  may  do  what, 
if  we  could  judge  only  by  the  formal  order,  it  has  done  here, 
that  is,  decide  whether  or  not  sec.  57  shall  apply  to  a particular 
railway,  whatever  the  result  may  be. 

If  the  Board  chooses  to  do  that  with  regard  to  the  street 
railway  of  the  appellant  company,  or  any  other  company  to 
which  the  Ontario  Railway  Act  applies,  I do  not  see  anything 
to  prevent  it.  What  the  effect  upon  that  company  may  be  is 
another  question.  Does  it  become  liable  to  interchange  with 
all  railways  which  are  subject  to  sec.  57,  or  only  with  street 
railways?  The  section  is  to  be  construed  not  merely  with  refer- 
ence to  Toronto  alone,  but  with  reference  to  the  whole  Province. 
There  might  well  be  places  in  which  a street  railway  would  be 
the  only  connecting  link  between  two  lines  of  steam  railways, 


244 


ONTARIO  LAW  REPORTS. 


[VOL. 


C.  A. 
1912 

Kb 

City  of 
Toronto 
and 

Toronto 
K.W.  Co. 

Magee,  J.A. 


and  in  which  it  might  be  constructed  with  a view  to  being  a con- 
necting link,  as  street  railways  are  not  limited  to  carriage  of  pas- 
sengers, and  street  railways  continue  to  be  street  railways  for  a 
mile  and  a half  outside  the  city  or  town.  It  might  be  to  the  public 
interest  that  such  a street  railway  should  be  both  entitled  and 
liable  to  interchange  with  lines  of  steam  railway. 

In  my  opinion,  the  Board  cannot  limit  the  application  of 
sec.  57,  if  it  declares  that  that  section  applies  to  the  appellant 
street  railway  or  any  other.  It  cannot  say  how  far  that  section 
shall  apply,  or  that  it  shall  apply  only  to  a limited  extent,  or 
with  regard  to  one  railway  or  one  street  railway. 

If  two  companies  to  which  the  section  applies  are  subsequently 
unable  to  agree,  and  the  intervention  of  the  Board  becomes 
necessary,  it  may  find  interchange  impracticable,  and  decline  to 
make  an  order  between  them,  or  may  have  to  require  conditions 
which  would  not  be  acceptable  to  an  applicant.  But  that  is  a 
different  matter  from  assuming  to  exercise,  under  sub-sec.  (6), 
the  right  to  limit  the  application  of  the  section. 

Although  the  order  appealed  from,  in  form,  purports  to  be 
separate  applications  of  sec.  57  to  each  of  these  street  railways, 
it  is  not  stated  just  what  view  the  members  of  the  Board  took 
of  the  meaning  of  the  sub-section.  But  in  their  reasons  they  in 
every  instance  couple  the  two  roads  together.  For  instance, 
it  is  stated:  “The  application  is  made  by  the  city  against  the 
Toronto  Railway  Company  for  the  purpose  of  securing  an  inter- 
change of  traffic  between  the  civic  car  lines  and  the  company's 
street  railway  system,  and  with  that  view  to  have  it  declared 
that  sec.  57  of  the  Ontario  Railway  Act  of  1906  applies  to  the 
company  and  the  city  street  railway  . . . We  do  not  think 

we  require  to  wait  until  the  last  spike  is  driven  before  deter- 
mining that  sec.  57  . . . shall  apply  to  the  city’s  and  the 

company’s  street  railways.  To  do  so  would  result  in  useless 
and  wasteful  duplication  . . . There  should  be  an  inter- 

change of  traffic;  and,  therefore,  we  make  the  determination 
asked  for  by  the  city.”  The  Board  also  expressed  its  opinion 
that  it  would  be  in  the  public  interest,  when  the  city  had  com- 
pleted and  equipped  the  railway,  to  arrange  for  its  operation 
with  the  present  street  railway  as  one  system.  Nowhere  does 


XXVI.] 


ONTARIO  LAW  REPORTS. 


245 


the  Board  deal  with  the  propriety  of  making  sec.  57  applicable 
to  any  one  road  alone. 

It  is,  I think,  evident  that,  although  the  city  had  only  asked 
for  the  application  of  sec.  57  to  the  company’s  street  railway, 
the  Board  was  not  considering  the  application  of  the  section  to 
either  railway  apart  from  the  other — and  was  making  the  declar- 
ation only  with  respect  to  the  company’s  railway,  because  it 
was  also  making  a similar  declaration  with  regard  to  the  city’s 
railway.  The  reasons  of  the  Board  for  its  decision  are  signed  by 
all  the  members,  and  are  before  this  Court,  and  it  is  evident 
that,  if  the  city  was  not  to  be  liable  to  interchange,  no  order  would 
have  been  made  in  respect  of  the  company  alone,  and  that  the 
order  was  only  made  for  the  purpose  of  interchange  between  these 
two  railways.  Taking,  as  I do,  the  view  that  the  Board  could 
not  apply  sec.  57  to  the  city  railways,  it  follows,  I think,  that, 
although  the  order  with  respect  to  the  company’s  railways  would, 
if  it  stood  alone,  be  quite  within  the  powers  of  the  Board,  yet, 
being  made  upon  a non-existent  basis,  and  with  a view  to  an 
impossible  result,  and  made  without  consideration  of  its  effect 
upon  the  company  with  regard  to  any  other  railway  or  street 
railway,  it  was  not  warranted  in  law  and  should  be  declared 
invalid. 

Whether,  in  view  of  the  provisions  of  sec.  21  of  the  Ontario 
Railway  and  Municipal  Board  Act,  1906  (6  Edw.  VII.  ch.  31), 
restricting  the  Board’s  power  to  interfere  with  a company’s 
rights  or  duties  under  an  agreement,  any  practical  beneficial 
result  would  be  attained  by  the  application  of  sec.  57  of  the 
Ontario  Railway  Act,  may  give  rise  to  serious  consideration.  The 
Board  have  a very  desirable  end  in  view,  and  it  is  to  be  hoped 
that  the  good  sense  and  public  spirit  of  both  parties  will  lead  them 
to  it. 


C.  A. 
1912 

Ru 

City  of 
Toronto 

AND 

Toronto 
R.W.  Co. 

Magee,  J.A. 


Appeal  allowed. 


246 


ONTARIO  LAW  REPORTS. 


1912 
April  16 


[MIDDLETON,  J.] 
Livingston  v.  Livingston. 


[vol. 


Partnership — Account — Profits  of  Separate  Business  Carried  on  by  one 
Partner — Assent  of  other  Partner — “ Competing ” Business — Sale  of 
Property  of  Firm  after  Death  of  one  Partner — Purchase  by  Trustee  for 
Surviving  Partner — Adequacy  of  Price — Liability  to  Account  for 
Profits  on  Resale — Allowance  to  Surviving  Partner  for  Services  in 
Liquidation — Trustee  Act,  sec.  40 — Trustee — Express  Trustee. 


One  of  two  members  of  a partnership  carrying  on  business  in  Ontario 
was  interested  as  a partner  in  a similar  business  carried  on  in  Michi- 
gan:— 

Held,  that  the  irresistible  inference  from  the  facts  in  evidence  was,  that 
what  was  done  by  the  one  partner  was  done  with  the  assent  and  ap- 
proval of  the  other;  and,  therefore,  the  rule  of  law  laid  down  by  Lind- 
ley,  L.J.,  in  Aas  v.  Benham,  [1891]  2 Ch.  244,  255,  “that  if  a partner 
without  the  consent  of  his  copartners  carries  on  a business  of  the  same 
nature  as,  and  competing  with,  that  of  the  firm,  he  must  account  for 
and  pay  over  to  the  firm  all  profits  made  by  him  in  that  business,” 
had  no  application. 

Quaere,  whether  the  Michigan  business  was  a “competing”  business,  with- 
in the  meaning  of  the  rule. 

Held,  also,  that  the  finding  of  a Referee  upon  a reference  for  the  taking  of 
the  accounts  of  the  partnership,  after  the  death  of  one  of  the  partners, . 
that  the  sale  of  an  oil  mill  owned  by  the  firm  to  a brother-in-law  of 
the  defendant  (the  surviving  partner),  was  provident,  and  the  price 
realised  was  as  much  as  the  mill  was  worth,  was  well  warranted  by 
the  evidence. 

Held,  also,  upon  the  evidence,  affirming  the  finding  of  the  Referee,  that 
the  surviving  partner  was,  in  truth,  the  purchaser,  and  that  his  brother- 
in-law  was  a mere  trustee  for  him. 

Held,  however,  in  this  reversing  the  conclusion  of  the  Referee,  that  the 
defendant  was  not  liable  to  account  for  profits  realised  when  the  oil 
mill  was  afterwards  sold  with  the  other  assets  of  a company  formed  to 
carry  on  an  oil  business,  to  which  the  mill  was  turned  over;  he  was 
liable  to  account  for  the  real  value  of  the  property  which  he  had 
improperly  purchased;  but  that  was  the  extent  of  his  liability;  and 
the  finding  that  the  property  sold  for  its  full  value  was  conclusive. 
Held,  also,  reversing  the  finding  of  the  Referee,  that  the  defendant  was 
not  entitled  to  an  allowance  for  his  services  in  connection  with  the 
liquidation  of  the  partnership. 

Section  40  of  the  Trustee  Act,  R.S.O.  1897,  ch.  129,  applies  only  to  ex- 
press trustees;  and,  semble,  a surviving  partner  is  not  a trustee  at 
all. 

An  appeal  by  the  defendant  and  a cross-appeal  by  the  plain- 
tiffs from  the  report  of  George  Kappele,  K.C.,  an  Official  Re- 
feree, dated  the  7th  December,  1910,  upon  a reference  for  taking 
the  accounts  of  a partnership  which  formerly  existed  between 
John  Livingston  and  James  Livingston.  John  Livingston  died 
in  1896;  and  this  action  was  brought  by  his  representatives 
against  James. 


ONTARIO  LAW  REPORTS. 


247 


XXVI. 


March  15  and  18.  The  appeal  and  cross-appeal  were  heard 
by  Middleton,  J.,  in  the  Weekly  Court  at  Toronto. 

7.  F.  Hellmuth,  K.C.,  and  J.  77.  Moss,  K.C.,  for  the  de- 
fendant. 

Wallace  Nesbitt,  K.C.,  and  H.  S.  Osier,  K.C.,  for  the  plain- 
tiffs. 


April  16.  Middleton,  J. : — The  facts  are  fully  set  forth  in 
the  very  elaborate  and  careful  report  of  the  learned  Referee, 
and  I do  not  need  to  set  them  forth  at  length.  Three  distinct 
matters  were  argued,  and  those  require  to  be  separately  dealt 
with. 

In  1856,  the  late  John  Livingston  and  James  Livingston 
came  to  Canada — young  men — without  any  capital,  and  through- 
out their  lives  worked  together  as  partners.  From  very  small 
beginnings  their  business  prospered,  until,  at  the  death  of  John, 
the  elder  brother,  in  1896,  their  joint  property  amounted  to 
more  than  half  a million  dollars.  During  all  this  time,  the 
brothers  appear  to  have  had  perfect  confidence  in  each  other, 
and  each  seems  to  have  accorded  to  the  other  the  greatest 
liberty  in  respect  to  the  assets  of  the  firm.  There  do  not 
appear  to  have  been  any  of  the  restrictions  that  would  usually 
have  existed  in  the  case  of  a partnership.  Each  brother  was 
practically  allowed  to  do  as  he  pleased.  If  he  wanted  money, 
he  took  it,  and  it  was  charged  to  him.  There  was  no  fixed  capi- 
tal. Each  brother  took  what  he  needed,  and  what  was  left  was 
used  for  the  purposes  of  the  business. 

In  the  course  of  time,  new  problems  arose.  Some  members 
of  the  family  were  taken  into  the  business.  Ultimately,  when 
McColl,  a son-in-law  of  James,  and  Peter  Livingston,  a nephew, 
in  1887  desired  to  be  taken  into  the  business,  James  came  to  the 
conclusion  that  it  was  inadvisable  to  introduce  into  the  concern 
any  more  relatives,  and  he  told  these  young  men  to  endeavour  to 
establish  a business  for  themselves  in  Michigan,  and  that  he 
would  assist  them.  It  appears  that  John  was  asked  to  join  in 
this,  but  declined.  Finally  an  arrangement  was  come  to  between 
the  two  young  men  and  James,  by  which  they  formed  a partner- 
ship to  operate  at  Yale,  Michigan;  and  there  is  no  doubt  that 
James  was  the  financial  backer  of  this  business.  He  desired  to 


Middleton,  J. 

1912 

Livingston 

v. 

Livingston. 


248 


ONTARIO  LAW  REPORTS. 


Middleton,  J. 

1912 

Livingston 

v. 

Livingston. 


fvOL. 


open  a separate  bank  account  for  its  financing;  and,  at  the 
suggestion  of  the  local  bank  manager,  he  opened  a special 
account — “J.  & J.  Livingston  Special.”  This  was  for  the  pur- 
pose of  avoiding  any  discussion  with  the  bank’s  head  office. 

This  business  was  carried  on  in  Michigan  for  nine  years 
before  John’s  death,  and  from  small  beginnings  grew  to  be  a 
very  substantial  affair.  There  was  no  secrecy  in  connection 
with  it.  It  had  many  dealings  with  the  firm  of  J.  & J.  Living- 
ston; and,  when  the  United  States  tariff  was  changed  so  as  to 
make  it  unprofitable  for  certain  branches  to  be  carried  on  from 
Canada,  some  business  formerly  done  by  the  Canadian  firm 
appears  to  have  been  substantially  transferred  to  the  American 
firm. 

Annual  statements  were  prepared  by  the  accountant,  and 
were  submitted  to  J ohn  Livingston.  In  none  of  these  statements 
was  the  Michigan  business  treated  as  being  an  asset  of  the 
Canadian  firm.  No  objection  whatever  was  ever  taken  by  John; 
in  fact,  from  the  beginning  of  the  whole  matter,  each  brother 
seems  to  have  been  entirely  content  to  abide  by  the  actions  of 
the  other. 

After  the  death  of  John,  those  claiming  under  him  appear  to 
have  felt  themselves  aggrieved  by  the  dilatoriness  of  James  in 
the  winding-up  of  the  partnership ; and  in  1901  an  action  for 
the  dissolution  of  the  partnership  was  brought.  This  action  has 
dragged  on  to  the  present  time. 

In  1902,  by  consent,  a judgment  for  a dissolution  was  pro- 
nounced, in  the  ordinary  form,  save  for  the  reservation  to  J ames 
of  the  right  to  make  a claim  to  be  remunerated  for  his  services 
in  connection  with  the  liquidation.  When  the  accounts  were 
brought  in  under  this  judgment  by  the  defendant,  a surcharge 
was  filed,  claiming,  among  other  things,  that  this  Yale  business 
was  an  asset  of  the  firm. 

The  other  members  of  the  Yale  firm  were  not  before  the 
Court ; yet  both  the  Master  to  whom  the  matter  was  originally 
referred,  and  the  learned  Referee,  have,  in  the  absence  of  the 
other  members,  assumed  to  deal  with  the  question  of  ownership. 
The  learned  Referee  has  found  that  the  business  is  and 
always  was  a separate  business,  and  that  it  was  not  owned  by 
the  partnership ; and  no  appeal  has  been  had  from  this  decision. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


249 


The  Referee  has,  however,  found  that  the  facts  bring  the  case 
within  the  rule  of  law  laid  down  by  Lindley,  L.J.,  in  Aas  v. 
Benham,  [1891]  2 Ch.  244,  255:  “It  is  clear  law  that  every  part- 
ner must  account  to  the  firm  for  every  benefit  derived  by  him 
without  the  consent  of  his  co-partners  from  any  transaction  con- 
cerning the  partnership  or  from  any  use  by  him  of  the  part- 
nership property,  name  or  business  connection.  . . . It  is 

equally  clear  that  if  a partner  without  the  consent  of  his  co- 
partners carries  on  a business  of  the  same  nature  as,  and  com- 
peting with,  that  of  the  firm,  he  must  account  for  and  pay  over 
to  the  firm  all  profits  made  by  him  in  that  business.” 

Upon  that  assumption,  he  has  directed  the  defendant  to  bring 
into  the  partnership  accounts  all  the  profits  received  by  him  from 
the  Yale  business;  and  I understand  this  ruling  to  include  not 
merely  the  profits  which  have  actually  been  divided,  but  profits 
which  have  gone  to  increase  the  capital  of  that  concern. 

Upon  the  argument  before  me  it  was  admitted  that  this  was 
too  wide,  and  that  James’s  liability,  if  any,  to  account,  must  be 
taken  to  have  terminated  upon  the  dissolution  of  the  Canadian 
firm  by  the  death  of  his  brother  John. 

With  great  respect  for  the  learned  Referee,  and  realising 
the  advantage  he  had  in  hearing  some  portion  of  the  evidence, 
I find  myself  unable  to  agree  with  him.  I think  the  irresistible 
inference  from  the  facts  is,  that  what  was  done  by  James  was 
done  with  the  assent  and  approval  of  John ; and  that,  therefore, 
the  rule  has  no  application. 

The  case  in  this  aspect  is  singularly  like  Kelly  v.  Kelly 
(1911),  20  Man.  L.R.  579,  decided  since  the  learned  Referee’s 
report. 

Had  I not  come  to  this  conclusion,  I would  have  hesitated 
long  before  determining  that  this  business  was  a competing  busi- 
ness within  the  rule  in  question.  When  the  business  was  estab- 
lished, the  intention  undoubtedly  was  to  locate  the  young  men 
far  from  home,  where  the  business  would  not  compete.  They 
were  to  go  to  another  country,  and  earn  their  own  experience, 
and  to  establish  an  independent  business  for  themselves;  James 
became  a partner  in  the  Yale  business  for  the  purpose  of  re- 
munerating him  for  his  advice  and  counsel,  and  above  all  for  his 
financial  assistance.  None  of  the  cases  upon  competing  business 


Middleton,  J. 

1912 

Livingston 

v. 

Livingston. 


17 — XXVI.  O.L.R. 


250 


ONTARIO  LAW  REPORTS. 


Middleton,  J. 

1912 

Livingston 

v. 

Livingston. 


[vol. 

at  all  resemble  this;  and,  when  the  relationship  which  existed 
between  the  brothers  is  borne  in  mind,  it  seems,  to  me  at  least, 
that  the  case  is  very  far  removed  from  the  facts  of  the  cases 
which  have  given  rise  to  the  rule. 

Upon  the  argument,  the  Wurth-Hairst  business  was  men- 
tioned as  forming  the  subject  of  a separate  ground  of  appeal. 
This  was  not  argued  in  detail,  as  I was  told  that  my  decision  in 
connection  with  the  Yale  business  would  govern  it. 

The  second  ground  of  appeal  is  in  connection  with  an  oil 
mill  owned  by  the  firm.  After  the  dissolution  and  after  the 
parties  were  at  arms’  length  and  represented  by  separate  solici- 
tors, negotiations  took  place  between  James  Livingston  and  the 
representatives  of  John  for  the  purchase  of  this  mill.  James 
offered  $45,000.  This  was  at  first  accepted,  but  the  acceptance 
was  withdrawn.  The  property  was  then  offered  for  sale,  and  was 
purchased  by  one  Erbach,  brother-in-law  of  James,  .for  $38,500. 
This  sale  was  attacked  before  the  Referee  as  being  a sale  at  an 
undervaluation;  but  the  Referee  found,  upon  the  evidence,  that 
the  sale  was  provident,  and  the  price  realised  was  as  much  as  the 
mill  was  worth.  This  finding  is  well  warranted  by  the  evidence. 
The  valuation  obtained  on  behalf  of  John’s  representatives,  of 
something  over  $48,000,  was  accompanied  by  the  statement 
that  no  such  price  could  be  realised  at  a sale,  but  that  it  repre- 
sented the  actual  value  of  the  machinery  as  a running  concern, 
and  that  the  value  placed  on  the  buildings  could  not  be  realised, 
because,  apart  from  the  oil  business — for  which  the  buildings 
were  adapted — they  had  no  utility. 

This  sale  was  further  attacked  upon  the  ground  that  James 
Livingston  was,  in  truth,  himself  the  purchaser,  and  that 
Erbach  was  a mere  trustee  for  him;  and  the  Referee  has  so 
found.  A company  was  incorporated  shortly  after  the  pur- 
chase, and  the  property  was  turned  over  to  it;  and  this  com- 
pany has,  in  its  turn,  sold  to  the  Dominion  Oil  Company.  The 
whole  transaction  was  financed  upon  James  Livingston’s  credit; 
and  neither  the  purchaser  nor  any  of  the  shareholders  of  the 
company  had  ever  put  any  money  into  the  concern.  I do  not 
think  it  was  open  to  the  Referee  to  inquire  into  the  title  of  the 
purchasers,  in  their  absence.  The  company,  although  the  crea- 
tion of  James  Livingston,  and  in  one  sense  almost  identical  with 


XXVI.] 


ONTARIO  LAW  REPORTS. 


251 


him,  was  still  a legal  entity,  and  conld  not  be  deprived  of  its 
property  in  its  absence;  but  James  Livingston  can  be  made  to 
account,  upon  a proper  basis  if  he  has  been  guilty  of  any  wrong- 
doing. 

Upon  the  appeal  before  me  it  was  argued  that  the  Referee’s 
finding  of  fact  was  not  correct.  No  doubt,  the  finding  is 
opposed  to  the  oath  of  all  those  concerned;  but  actions  fre- 
quently speak  louder  than  words;  and  the  conclusion  appears 
to  me  irresistible  that  Livingston  was,  in  truth,  the  purchaser. 

I was  urged  to  find  that  the  correct  inference  from  the  evi- 
dence is,  that  Livingston  was  not  the  purchaser  at  the  sale ; that 
Erbach  was  not  a trustee  for  him;  but  that,  after  the  contract 
had  ceased  to  be  executory,  Livingston  had  purchased  from 
Erbach.  The  difficulty  is,  that  there  is  no  evidence  to  support 
this  contention,  and  that  it  is  quite  opposed  to  what  is  stated  by 
every  one.  It  was  suggested  that  to  find  otherwise  would  be  to 
impute  some  improper  conduct  or  some  ignorance  of  the  law  to 
the  late  Mr.  Barwick.  It  do  not  think  it  is  necessary  to  do  this. 
I think  it  extremely  unlikely  that  Mr.  Barwick  knew  the  facts. 
Livingston,  no  doubt,  was  advised,  and,  no  doubt,  knew,  that  he 
could  not  buy  directly  or  indirectly;  but,  nevertheless,  I think 
that  Erbach  did  buy  for  him;  and  everything  that  has  taken 
place  subsequently  is  consistent  only  with  this  view. 

But  I cannot  at  all  agree  with  the  consequences  the  Referee 
has  attributed  to  this  finding  of  fact.  He  says  that  the  defend- 
ant must  account  to  the  estate  for  what  was  received  by  the 
James  Livingston  Linseed  Oil  Company  when  it  went  into  the 
oil  merger  and  transferred  its  property  to  the  Dominion  Linseed 
Oil  Company. 

I do  not  think  that  this  is  the  result.  Before  the  transaction 
was  attacked,  Erbach  had  conveyed  the  property  to  the  James 
Livingston  company.  Its  title  has  not  been  impeached.  This 
transfer  was  at  the  same  purchase-price,  and  merely  involved 
the  assumption  of  the  liability  to  pay  the  $38,500  to  the  estate ; 
so  there  was  then  no  profit.  Nevertheless,  Livingston  would  be 
liable  to  account  for  the  real  value  of  the  property  which  he  had 
improperly  purchased;  but  it  has  been  found  that  the  property 
sold  for  its  full  value,  and  this  finding  has  not  been  appealed 
from;  and  I think  this  ends  his  liability. 


Middleton,  J. 

1912 

Livingston 

v. 

Livingston. 


252 


ONTARIO  LAW  REPORTS. 


Middleton,  J, 

1912 

Livingston 

v. 

Livingston. 


[VOL. 


The  consequences  of  the  Referee’s  findings  appear  to  be 
most  serious.  The  James  Livingston  Linseed  Oil  Company -car- 
ried on  business  for  years.  The  buildings  and  machinery  formed 
a very  small  part  of  its  real  assets.  It  was,  as  a going  concern, 
transferred — probably  at  a fictitious  price — to  the  Dominion 
company;  and  it  would  be  an  extraordinary  thing  if  the  result 
should  be  that  the  estate  should  receive  much  more  than  the 
buildings  and  machinery  were  worth,  and  much  more  than  these 
buildings  and  machinery  cost  or  could  be  duplicated  for.  The 
question  involved  somewhat  resembles  that  discussed  in  Lindley 
on  Partnership,  7th  ed.,  p.  634,  concerning  the  liability  of 
partners  who  carry  on  a partnership  business,  after  their  dis- 
solution, and  the  profits  made  arise,  not  so  much  from  the  part- 
nership assets  which  are  used,  as  from  the  skill,  industry,  and 
ability  of  the  surviving  partners. 

The  question  of  the  measure  of  damages  of  a trustee  who 
becomes  himself  a purchaser  is  dealt  with  in  the  Divisional 
Court  in  the  case  of  Atkinson  v.  Casserley  (1910),  22  O.L.R.  527. 

The  third  question  is  the  propriety  of  the  allowance  made  by 
the  Referee  to  the  defendant  for  his  services  in  connection  with 
the  liquidation  of  the  partnership.  No  doubt,  the  defendant 
has  rendered  great  services  to  the  partnership ; and,  as  a matter 
of  fairness  and  equity,  his  services  ought  to  be  remunerated; 
but  I fear  that  the  law  is  against  his  claim.  In  England  it  is  well 
settled,  though  I have  been  unable  to  find  any  case  indicating 
the  precise  ground  upon  which  such  a claim  is  disallowed.  It 
may  be  because  of  the  nature  of  the  partnership  contract;  or  it 
may  be  because  in  England  trustees  render  their  services  gra- 
tuitously, unless  it  is  otherwise  expressly  provided  in  the  trust- 
deed.  More  probably  there  has  never  been  any  exact  state- 
ment of  the  reason  for  the  rule,  because  no  English  lawyer 
would  think  of  placing  the  right  of  a surviving  partner  higher 
than  the  right  of  a trustee. 

I can  find  no  trace  of  any  such  allowance  having  been  made 
in  Ontario.  The  right,  if  it  exists,  must  be  based  upon  the 
Trustee  Act.  For  convenience  I refer  to  the  Act  in  the  revision 
of  1897,  ch.  129,  which  in  this  respect  is  similar  to  the  Act  of 
1887,  which  probably  applies.  The  sections  dealing  with  this 
matter  are  40  et  seq.  Section  40  provides  that  “any  trustee 


XXVI.] 


ONTARIO  LAW  REPORTS. 


253 


under  a deed,  settlement  or  will  ...  or  any  other  trustee, 
howsoever  the  trust  is  created,”  shall  be  entitled  to  an  allow- 
ance. These  words,  it  seems  to  me,  apply  only  to  express 
trustees;  and  this  impression  is  strengthened  by  reference  to 
sec.  27,  which  provides  that  the  expression  “ trustee,”  in  the 
next  five  sections  of  the  Act,  includes  “a  trustee  whose  trust 
arises  by  construction  or  implication  of  law,  as  well  as  an  express 
trustee.”  So,  even  if  a surviving  partner  could  be  regarded  as 
a trustee,  he  would  not  he  within  the  provision  of  the  statute 
relating  to  remuneration. 

Besides  this,  there  is  authority  for  the  statement  that  a sur- 
viving partner  is  not  a trustee  at  all:  Knox  v.  Gye  (1872),  L.R. 
5 H.L.  656.  His  position,  no  doubt,  imposes  certain  obligations 
and  duties  which  are  in  their  nature  fiduciary;  but  it  is  not 
every  one  who  is  subjected  to  these  obligations  and  restraints 
who  can  claim  to  be  a trustee  and  entitled  to  all  the  privileges 
of  a trustee.  A wider  construction  has  been  adopted  in  the 
interpretation  of  the  statutory  provision  corresponding  with 
sec.  27 : see  In  re  Lands  Allotment  Co.,  [1894]  1 Ch.  616,  at  p. 
632;  but  I am  precluded  from  applying  this  reasoning  to  the 
case  in  hand  because  of  the  view  I entertain  that  sec.  40  applies 
only  to  express  trustees. 

The  result  is,  that  both  appeal  and  cross-appeal  succeed  to 
the  extent  indicated;  and,  as  success  is  divided,  there  should 
be  no  costs. 


Middleton,  J. 

1912 

Livingston 

v. 

Livingston. 


18 — XXVI.  O.L.R. 


254 


ONTARIO  LAW  REPORTS. 


[VOL. 


[MEREDITH,  C.J.C.P.] 

1912 
April  17 


It  is  ultra  vires  of  a company  incorporated  under  the  Ontario  Companies 
Act,  R.S.O.  1897,  ch.  191,  to  issue  shares  at  a discount;  and  held,  that 
the  respondent,  who  had  paid  for  five  shares  and  was  allotted  by  the 
company  seven  and  a half  shares  described  as  fully  paid-up  (the  extra 
shares  being  regarded  as  paid  for  by  services  rendered  in  promoting 
the  company),  and  had  acquiesced  and  acted  as  a holder  of  seven  and 
a half  shares,  was  not  entitled,  upon  the  ground  of  mistake,  to  be  re- 
lieved from  his  position  as  a shareholder  in  respect  of  the  extra  two 
and  a half  shares;  and  a resolution  of  the  shareholders,  “that  all  stock 
certificates  which  have  been  regarded  in  the  light  of  bonus  stock  be 
recalled  into  the  company,”  and  what  was  done  under  it,  namely,  the 
Cancellation  of  the  respondent’s  certificate  for  seven  and  a half  shares 
and  the  issue  of  a new  certificate  to  him  for  five  fully  paid-up  shares, 
were  ultra  vires  of  the  company;  and  the  respondent  was  liable,  upon 
the  winding-up  of  the  company,  as  a contributory  in  respect  of  two  un- 
paid shares — not  two  and  a half,  because  there  is  no  warrant  in  the 
Act  to  allot  anything  less  than  a share,  and  the  respondent’s  liability 
did  not  extend  to  the  half  share. 

Sections  10,  33,  and  37  of  the  Ontario  Companies  Act,  R.S.O.  1897,  ch. 
191,  considered. 

Review  and  application  of  cases  under  the  English  Companies  Acts. 

Ooregum  Gold  Mining  Go.  of  India  V.  Roper,  [1892]  A.C.  125,  specially  re- 
ferred to. 

The  mistake  of  the  respondent  was  not  a mistake  of  fact,  but  a mistake  as 
to  the  law. 

Re  Cornwall  Furniture  Co.  (1910),  20  O.L.R.  520,  followed. 


Re  McGill  Chair  Co. 

Munro's  Case. 

Company — Winding-up — Contributory — Shares  Issued  at  a Discount  as  fully 
Paid-up — Ultra  Vires — Liability  of  Allottee — Mistake  of  Law — Repu- 
diation— Cancellation  of  Allotment — Resolution  of  Shareholders  — 
Ultra  Vires — Ontario  Companies  Act , R.S.O.  1897,  ch.  191,  secs.  10, 
33,  37 — Allottee  Treated  as  Shareholder — Knowledge  and  Acquies- 
ence — Allotment  of  Half  Share — Liability. 


An  appeal  by  the  liquidator  of  the  company  from  an  order 
of  the  Local  Master  at  Cornwall,  dated  the  12th  'September, 
1911,  refusing  to  settle  the  name  of  Munro,  the  respondent,  on 
the  list  of  contributories  in  respect  of  two  shares  and  one  half- 
share of  the  capital  stock  of  the  company,  upon  a reference  for 
winding-up  under  the  Dominion  Winding-up  Act. 


November  20,  1911.  The  appeal  was  heard  by  Meredith, 
C.J.C.P.,  in  the  Weekly  Court  at  Toronto. 

George  'Wilkie,  for  the  liquidator. 

J.  A.  Macintosh,  for  the  respondent. 

April  17,  1912.  Meredith,  C.J. : — The  facts,  as  far  as 
they  are  material  to  the  question  for  decision,  are  undisputed, 


XXVI.]  ONTARIO  LAW  REPORTS. 

and  are:  that  the  respondent  was  asked  by  McGill,  a director 
of  the  company,  to  subscribe  for  shares,  and  was  promised  seven 
and  a half  fully  paid-up  shares  of  $100  each,  for  $500;  and  he 
was  advised  by  Pitts,  another  director,  to  do  so.  The  respondent 
agreed  to  take  the  shares  on  these  terms,  and  accordingly  sub- 
scribed for  them  and  paid  the  $500,  receiving  on  the  16th  Janu- 
ary, 1907,  a stock  certificate  describing  the  shares  as  fully  paid- 
up. 

This  transaction  was  not  an  isolated  one;  for,  as  I under- 
stand, all  the  shares  issued  by  the  company  were  subscribed  for 
and  allotted  on  the  same  terms. 

All  parties  acted  in  good  faith  and  under  the  belief  that 
the  transaction  was  one  into  which  the  company  might  lawfully 
enter. 

A resolution  of  the  directors  had  been  passed  on  the  31st 
October,  1906,  “that  services  in  connection  with  the  promotion 
and  organisation  of  the  McGill  Chair  Company  be  paid  for  in 
fully  paid-up  shares  of  the  stock  of  the  company,  and  that  certi- 
ficates be  issued  for  the  same.” 

Instead  of  allotting  bonus  shares  to  the  persons  who  had 
rendered  the  services  mentioned  in  the  resolution,  the  plan  was 
adopted  of  giving  to  each  person  who  subscribed  for  shares 
three  shares  for  every  two  for  which  he  paid,  or  at  that  rate; 
the  additional  fifty  per  cent,  being  provided  by  the  shares  the 
issue  of  which  was  authorised  by  the  resolution. 

Although  this  was  the  plan  adopted,  Munro  was  treated  in 
the  books  of  the  company  as  having  subscribed  for  five  shares, 
and  paid  for  them  with  the  $500,  and  as  holding  two  and  a 
half  shares  paid  for  by  “services  rendered  in  connection  with 
promoting  this  company.” 

The  respondent,  on  the  24th  April,  1908,  gave  a proxy  to  Mr. 
Campbell  to  vote  for  him  at  a shareholders’  meeting  to  be  held 
on  the  27th  of  that  month,  and  in  it  he  described  himself  as  the 
holder  of  seven  and  a half  shares;  and  the  respondent  himself 
attended  two  of  such  meetings. 

In  January,  1910,  the  company,  as  the  learned  Master  puts 
it,  was  in  deep  water  financially. 

Some  of  the  shareholders,  to  whom  shares  had  been  allotted 


255 

Meredith,  C..T. 

1912 

Re 

McGill 
Chair  Co. 
Munro’s 
Case. 


256 


ONTARIO  LAW  REPORTS. 


[VOL. 


Meredith,  C.J. 

1912 

Re 

McGill 
Chair  Co. 
Munro’s 
Case. 


on  similar  terms  to  those  on  which  the  respondent’s  shares  were 
allotted  to  him,  had,  about  a year  before  this,  learned  of  the 
illegality  of  the  transaction,  and  demanded  that  the  certificates 
which  had  been  issued  to  them  should  be  cancelled  and  new 
certificates  issued  for  the  shares  for  which  they  had  fully  paid 
in  cash.  These  demands  and  occasional  threats  of  legal  pro- 
ceedings to  enforce  them  continued  during  the  year  preceding 
the  passing  of  the  resolution  to  which  I shall  next  refer. 

On  the  14th  January,  1910,  at  a meeting  of  the  shareholders 
it  was  resolved : ‘ ‘ That  all  stock  certificates  which  have  been  re- 
garded in  the  light  of  bonus  stock  be  recalled  into  the  company, 
and  whereas  Thomas  McGill  performed  special  services  in  con- 
nection with  the  promotion  of  the  company  is  desirous  of 
retaining  his  stock  that  he  may  be  exempt  from  the  above 
resolution.  ’ 9 

The  respondent  made  no  separate  demand  to  have  his  bonus 
shares  cancelled,  but  he  was  present  at  this  meeting  and  voted 
in  favour  of  the  resolution. 


In  pursuance  of  this  resolution,  the  stock  certificates,  except 
McGill’s,  were  called  in  and  cancelled,  and  on  the  22nd  Janu- 
ary, 1910,  a new  certificate  was  issued  to  the  respondent  for 
five  fully  paid-up  shares. 

In  the  view  of  the  Master,  the  respondent,  in  accepting  the 
seven  and  a half  shares,  acted  under  a mistake  of  fact;  and, 
having  repudiated  the  bonus  shares,  as  the  Master  found,  as  soon 
as  he  became  aware  of.  the  mistake,  he  was  entitled  to  have  the 
allotment  of  them  cancelled,  as  was  done. 

The  mistake  under  which,  as  the  Master  thought,  the  re- 
spondent acted  was  in  believing  that  the  seven  and  a half  shares 
were,  as  they  were  represented  to  be,  fully  paid-up. 


I am  unable  to  agree  with  this  view.  The  mistake  of  the 
respondent  was  not,  in  my  opinion,  a mistake  of  fact,  but  a 
mistake  as  to  the  law. 


It  is  not  like  the  case  of  Burkinshaw  v.  Nicolls  (1878),  3 App. 
Cas.  1004,  where  the  company  was  held  to  be  estopped  from 
alleging  that  the  shares  were  not  fully  paid-up,  by  the  certificate 
which  it  had  issued,  and  on  the  faith  of  which  a third  person 
had  purchased  the  shares  from  the  person  described  in  the  certi- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


257 


ficate  as  being  the  owner  of  them,  stating  that  they  were  fully 
paid-up. 

The  respondent  dealt  directly  with  the  company,  and  knew 
that  he  was  purchasing  from  it  shares  that  had  not  been  issued 
to  any  one  else,  but  were  being  issued  then  for  the  first  time; 
and  the  mistake  under  which  he  laboured  was  the  belief  that  the 
company  had  a right  to  issue  shares  to  him  at  a discount  of  one- 
third  of  their  face  value,  for  that  was  the  effect  of  the  trans- 
action. 

The  position  of  the  respondent  is  well  described  by  what  was 
said  by  Bowen,  L.J.,  in  Ex  p.  Sandy s (1889),  42  Ch.  D.  98,  117. 
The  defendant  in  that  case  sought  to  have  the  register  rectified 
by  striking  out  her  name  in  respect  of  six  hundred  and  seventy- 
three  shares  issued  at  a discount,  and  the  money  she  had  paid 
in  respect  of  them  repaid  to  her.  ‘ ‘ The  question,  ’ ’ said  the  Lord 
Justice,  “is,  whether  the  respondent,  whose  name  is  upon  the 
register,  has  agreed  to  become  a member.  The  original  contract 
under  which  she  applied  for  shares  was  not  one  that,  as  long  as 
it  rested  in  fieri , could  have  been  enforced.  She  applied  for 
shares  to  be  given  to  her  coupled  with  a condition  which  the  law 
would  not  recognise,  and  the  company  had  no  right,  disregard- 
ing the  condition,  to  force  upon  her  something  which  she  had 
not  asked  for.  If  the  case  stood  there,  there  would  have  been 
an  end  of  the  matter.  The  original  contract  was  not  one  which 
could  have  been  enforced,  and  in  giving  her  the  shares  without 
attaching  the  condition  to  them,  which  she  made  a portion  of 
her  offer,  the  company  were  not  giving  her  what  she  asked  for. 
But  the  matter  does  not  rest  there,  and  this  is  just  the  point 
of  the  case.  After  her  name  was  placed  on  the  register  and 
after  she  knew  that  her  name  was  on  the  register,  she  did  cer- 
tain acts  which  were  only  consistent  with  an  intention  on  her 
part  to  be  treated  as  a member  of  the  company,  and  to  treat 
herself  as  a member  of  the  company  in  respect  of  these  particu- 
lar shares  which  had  been  so  appropriated  to  her.  If  that  is  not 
evidence  of  an  agreement  to  be  a member,  I really  do  not  know 
what  is.”  Lindley,  L.J.,  in  the  same  case  (p.  115),  says:  “There 
never  has  been  from  the  beginning  to  the  end  any  mistake  on 
her  part  about  the  facts.  Such  a mistake  as  there  has  been  was 
a mistake  by  her,  if  any,  as  to  the  legal  effect  of  what  she  has 


Meredith,  C.J. 

1912 


Re 

McGill 
Chair  Co. 
Munro’s 
Case. 


258 


ONTARIO  LAW  REPORTS. 


Meredith,  C.J. 

1912 

Re 

McGill 
Chair  Co. 
Munro’s 
Case. 


[VOL. 


done.  She  has  not  taken  these  shares  on  the  theory  or  supposi- 
tion that  they  were  in  fact  paid-np  to  the  full  extent  of  £5. 
She  knew  all  the  time  that  they  were  not  paid-np,  and  were 
never  intended  to  be  paid-np.  No  doubt  she  thought,  not  know- 
ing the  law,  that  she  never  would  have  to  pay  the-  balance.  . . 
Now  the  moment  she  gets  these  shares  and  finds  she  is  on  the 
register,  what  does  she  do?  Does  she  repudiate?  Assume  she 
might,  but  does  she?  Quite  the  reverse;  being  still  in  ignor- 
ance, as  she  says,  of  hex  rights — not  in  ignorance  of  any  material 
fact,  but  being  still  in  ignorance,  or  under  an  erroneous  impres- 
sion as  to  the  legal  effect  of  what  she  is  about — she  treats  her- 
self as  a shareholder  in  respect  of  these  shares.”  And  Cotton, 
L.J.,  points  out  (p.  113)  that  there  was  in  the  case  what  was 
wanting  in  In  re  Almada  and  Tirito  Co.  (1888),  38  Ch.  D.  415, 
namely,  the  assent  of  the  shareholder  to  her  name  being  on  the 
register  in  respect  of  the  shares;  and  he  distinguished  Beck’s 
Case  (1874),  L.R.  9 Ch.  392,  saying  that  “the  mistake  on  which 
the  applicant  was  there  relying  was  not  a mistake  in  law,  but  a 
mistake  in  fact;”  and,  after  a reference  to  the  facts  of  that 
case,  he  added:  “If  there  had  been  a mistake  of  the  general 
law  of  the  country,  he  could  not  have  been  relieved.  But  what 
the  Lords  Justices  held  was,  that  he  was  entitled  to  have  his 
name  struck  off  the  register  because  he  had  been  put  on  under 
a contract  entered  by  him  under  a mistake  in  fact,  of  which  he 
was  entitled  to  have  the  benefit.” 

In  Welton  v.  Saffery,  [1897]  A.C.  299,  the  shares  had  been 
issued  at  a discount,  and  it  was  held  that  the  holders  of  them 
were  not  released  from  liability  in  a winding-up  to  calls  for  the 
amount  unpaid  on  their  shares,  for  the  adjustment  of  the  rights 
of  the  contributories  inter  se,  as  well  as  for  the  payment  of  the 
company’s  debts  and  the  costs  of  winding-up.  Speaking  of  the 
nature  of  the  transaction,  Lord  Macnaghten  said  (pp.  321-2)  : 
“The  truth  is,  as  it  seems  to  me,  that  there  never  was  a contract 
between  the  company  or  the  shareholders,  on  the  one  hand,  and 
the  persons  to  whom  these  discount  share  were  offered,  on  the 
other.  There  was  an  offer  by  the  directors  purporting  to  act  on 
behalf  of  the  company,  but  it  was  an  offer  of  that  which  the 
company  could  not  give,  because  the  law  does  not  allow  it. 
There  was  an  acceptance  by  the  discount  shareholders  of  that 


XXVI. 


ONTARIO  LAW  REPORTS. 


259 


offer.  But  that  offer  and  acceptance  could  not  constitute  a 
contract.  Both  parties  acted  under  a misconception  of  law,  and 
the  whole  thing  was  void.  The  company,  however,  placed  the 
names  of  the  discount  shareholders  on  the  register ; they  allowed 
their  names  to  remain  there  until  their  remedy  against  the  com- 
pany was  gone;  and  now  they  cannot  be  heard  to  say  that  they 
were  not  shareholders.” 

Ex  p.  Sandy s was  followed  by  Britton,  J.,  in  Be  Cormvall 
Furniture  Co.  (1910),  20  O.L.R.  520,  and  his  decision  was 
affirmed  by  the  Court  of  Appeal.  The  question  in  that  case 
was  as  to  the  position  of  persons  to  whom  bonus  shares  had  been 
isued;  and,  dealing  with  it,  the  Chief  Justice  of  Ontario  said 
(p.  533)  : “It  is  now  too  late  for  these  persons  to  ask  to  be  re- 
lieved from  their  position  as  holders  of  the  shares  which  they 
thus  acquired.  No  doubt,  they  acted  under  a mistaken  belief, 
but  that  fact  does  not  suffice  to  entitle  them  to  be  relieved. 
Having  assented  to  the  allocation  of  the  shares  and  accepted  the 
position  of  holders  in  respect  of  them,  they  cannot  be  relieved 
from  the  liability  attached  to  the  position  simply  because  they 
made  a mistake  in  the  general  law.  There  is  no  question  that 
the  facts  were  fully  known  to  them.” 

In  the  Cornwall  case,  the  question  arose  after  an  order  for  a 
winding-up  of  the  company  had  been  made ; and  I refer  to  it 
only  for  the  purpose  of  shewing  that  a mistake  such  as  that 
under  which  the  respondent  laboured  is  a mistake  as  to  the  law, 
and  not  a mistake  as  to  facts. 

In  the  English  cases  it  will  have  been  noticed  that  the 
assent  of  the  shareholder  to  his  name  appearing  on  the  register 
of  shareholders  is  spoken  of  as  the  determining  factor  for 
fixing  him  with  liability  as  a shareholder;  and  in  the  case  at 
bar  there  is  nothing  to  shew  that  the  respondent  knew  that  his 
name  had  been  entered  in  the  register  as  the  holder  of  the  seven 
and  a half  shares.  That  circumstance  is  not,  in  my  opinion, 
material,  as  the  real  determining  factor  is  his  knowledge  that 
the  company  treated  him  as  a shareholder  and  his  acquiescence 
in  being  so  treated,  and  that  I take  to  have  been  the  opinion 
of  the  Chief  Justice  of  Ontario,  judging  from  his  observations  in 
the  Cormvall  case  which  I have  quoted — “Having  assented  to 


Meredith,  C.J. 

1912 

Re 

McGill 
Chair  Co.. 
Munro’s. 
Case. 


260 


Meredith,  C.J. 

1912 

Re 

McGill 
Chair  Co, 
Mtjnro’s 
Case. 


ONTARIO  LAW  REPORTS.  [vol. 

the  allocation  of  the  shares  and  accepted  the  position  of  holders 
in  respect  of  them,  they  cannot  be  relieved.  . . ” 

The  Act  nnder  which  the  company  was  incorporated,  the 
Ontario  Companies  Act,  R.S.O.  1897,  ch.  191,  contains  no  pro- 
vision similar  to  sec.  25  of  the  English  Companies  Act  of  1867, 
which  provides  that  every  share  “ shall  be  deemed  and  taken 
to  have  been  issued  and  to  be  held  subject  to  the  payment  of 
the  whole  amount  thereof  in  cash,  unless  the  same  shall  have 
been  otherwise  determined  by  contract  duly  made  in  writing, 
and  filed  with  the  Registrar  of  Joint  Stock  Companies  at  or 
before  the  issue  of  such  shares.” 

It  is  clear,  however,  from  Ooregum  Gold  Mining  Co.  of 
India  v.  Roper,  [1892]  A.C.  125,  that,  apart  altogether  from  the 
provisions  of  sec.  25,  the  issue  of  shares  at  a discount  is  ultra 
vires  a company  whose  capital  is  divided  into  shares  of  a fixed 
amount,  and  the  liability  of  the  shareholders  of  which  is  limited 
to  the  amount  unpaid  on  their  shares.  See  the  observations  of 
the  Lord  Chancellor  (p.  134),  Lord  Watson  (pp.  135-6),  Lord 
Macnaghten  (p.  145),  and  Lord  Morris  (p.  148).  See  also 
Welt  on  v.  Saffery,  supra. 

There  is,  in  my  opinion,  no  reason  why  these  and  similar 
cases  should  not  be  applicable  to  companies  incorporated  under 
the  law  of  Ontario. 

The  Ontario  Companies  Act,  R.S.O.  1897,  ch.  191,  requires 
that  the  number  of  the  shares  and  the  amount  of  each  share 
shall  be  stated  in  the  application  for  incorporation  (sec.  10)  ; 
and  sec.  33  provides  that  “not  less  than  ten  per  centum  upon 
the  allotted  shares  of  stock  of  the  company  shall,  by  means  of 
one  or  more  calls  formally  made,  be  called  in  and  made  payable 
within  one  year  from  the  incorporation  of  the  company;  the 
residue  when  and  as  the  by-laws  of  the  company  direct;”  and, 
although  there  is  no  express  provision  limiting  the  liability  of 
shareholders  to  the  amount  unpaid  on  their  shares,  sec.  37,  im- 
pliedly at  all  events,  so  limits  it;  and  the  constitution  of  a 
company  incorporated  under  that  Act  possesses,  therefore,  both 
of  the  features  which  led  to  the  conclusion  that  it  was  idtra 
vires  of  a company  incorporated  under  the  English  Act  of  1867 
to  issue  shares  at  a discount;  and  in  the  reported  cases  in  this 
Province  the  English  decisions  have  been  applied,  uotwith- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


261 


standing  the  absence  of  any  provision  in  onr  Companies  Acts 
similar  to  sec.  25  of  the  English  Companies  Act. 

For  these  reasons,  I am  of  opinion  that  the  respondent  was 
not  entitled,  npon  the  ground  of  mistake,  to  be  relieved  from  his 
position  of  shareholder  in  respect  of  the  two  and  half  shares; 
and  it  follows,  I think,  that  the  resolution  of  the  14th  January, 
1910,  and  what  was  done  under  it,  was  ultra  vires  the  company. 

In  the  Ooregum  case  the  Lord  Chancellor  (at  p.  133)  said: 
“It  seems  to  me  that  the  system  thus”  (i.e.,  by  the  Companies 
Act)  “created  by  which  the  shareholder’s  liability  is  to  be 
limited  by  the  amount  unpaid  upon  his  shares,  renders  it  impos- 
sible for  the  company  to  depart  from  that  requirement,  and 
by  any  expedient  to  arrange  with  their  shareholders  that  they 
shall  not  be  liable  for  the  amount  unpaid  on  the  shares,  although 
the  amount  of  those  shares  has  been,  in  accordance  with  the  Act 
of  Parliament,  fixed  at  a certain  sum  of  money.  It  is  manifest 
that  if  the  company  could  do  so  the  provision  in  question  would 
operate  nothing.  I observe  in  the  argument  it  has  been  sought 
to  draw  a distinction  between  the  nominal  capital  and  the  capital 
which  is  assumed  to  be  the  real  capital.  I can  find  no  auth- 
ority for  such  a distinction.  The  capital  is  fixed  and  certain, 
and  every  creditor  of  the  company  is  entitled  to  look  to  that 
capital  as  his  security.” 

In  Bellerby  v.  Roivland  & Marwood’s  Steamship  Co.,  [1902] 
2 Ch.  14,  the  Master  of  the  Rolls,  quoting  this  passage  from 
the  speech  of  the  Lord  Chancellor,  added  (p.  26)  : “And  the 
opinions  of  the  other  learned  Lords  are  to  the  same  effect.  The 
justification  of  forfeitures  rests  upon  the  statute  itself,  and  I 
think  that  since-  Trevor  v.  Whitworth  (1887),  12  App.  Cas.  409, 
no  authority  can  be  relied  on  as  justifying  a surrender  having 
the  effect  of  reducing  capital  which  cannot  be  supported  as  a 
form  of  forfeiture.”  Stirling,  L.J.,  in  the  same  case  (p.  29), 
expressed  the  opinion  that  ‘ 1 the  weight  of  authority  is  in  favour 
of  the  view  that  forfeiture,  which  is  specifically  mentioned  in 
the  Act  of  1862,  stands  on  a special  footing,  and  that  surrenders 
can  only  be  supported  in  circumstances  which  would  justify 
forfeiture.”  Cozens-Hardy,  L.J.  (p.  31),  dealing  with  the  same 
question,  says:  “When,  however,  the  transaction  involves,  as  in 


Meredith,  C.J. 

1912 

Re 

McGill 
Chair  Co. 
Munro’s 
Case. 


262 


ONTARIO  LAW  REPORTS. 


Meredith,  C.J. 

1912 

Re 

McGill 
Chair  Co. 
Munro’s 
Case. 


[VOL. 


the  present  case,  the  release  by  the  company  to  the  shareholder 
of  uncalled  capital  on  their  shares  it  seems  to  me  that  it  is, 
within  Trevor  v.  Whitworth,  a reduction  of  capital  not  sanc- 
tioned by  law.  The  decision  of  the  House  of  Lords  in  the 
Ooregum  case,  that  shares  in  a limited  company  cannot  be 
issued  at  a discount,  involves  the  principle,  that  the  company 
cannot  be  any  device  relieve  a shareholder  from  the  liability 
to  pay  the  full  amount  due  on  his  shares.  This  would  be  the 
result,  if  the  shares  had  been  retained  by  the  plaintiffs,  instead 
of  being  surrendered  to  the  company.  But  the  fact  that  in 
consideration  of  the  release  the  shares  were  surrendered  seems 
to  me  to  render  the  transaction  no  better.  Uncalled  capital  is 
part  of  the  assets  of  the  company.  . . . The  company,  there- 
fore, parted  with  £415,  a portion  of  its  assets,  in  consideration 
of  the  acquisition  of  the  shares.  This  was  a purchase  of  the 
shares,  and  is  directly  within  the  authority  of  Trevor  v.  Whit- 
worth 

I do  not  understand  how  half  a share  came  to  be  allotted.  I 
find  no  warrant  in  the  Act  to  allot  anything  less  than  a share, 
and  I do  not  think  that  the  liability  which,  I hold,  attached  to 
the  respondent,  extends  to  the  half  share  which  the  company 
assumed  to  allot  to  him.  This  point  was  not  taken  on  the 
argument,  and  counsel  may  speak  to  it  if  the  appellant  con- 
tends otherwise ; and,  subject  to  this,  an  order  will  issue  allowing 
the  appeal  and  substituting  for  the  order  of  the  Local  Master 
an  order  that  the  name  of  the  respondent  be  put  upon  the  list 
of  contributories  in  respect  of  two  shares. 

There  will  be  no  costs  of  the  appeal  or  of  the  application  to 
the  Local  Master. 

Since  writing  the  foregoing,  my  attention  has  been  called  to 
a recent  decision  of  my  brother  Middleton,  Re  Matthew  Guy 
Carriage  and  Automobile  Co.,  Thomas’s  Case  (1912),  3 O.W.N. 
902,  which,  it  is  said,  is  opposed  to  the  view  I have  expressed  as 
to  the  effect  of  the  resolution  to  cancel  the  shares  and  the 
action  taken  upon  it.  I find,  however,  on  inquiry  from  my 
learned  brother,  that  it  is  not,  and  that  in  that  case  the  contract 
to  take  the  shares  was  still  executory  at  the  time  the  resolution 
to  cancel  the  bonus  shares  was  passed. 

[Leave  to  appeal  to  the  Court  of  Appeal  from  the  above  decision  was 
granted  by  Middleton,  J.,  on  the  27th  May,  1912  : see  3 O.W.N.  1326.] 


XXVI.] 


ONTARIO  LAW  REPORTS. 


263 


[IN  CHAMBERS.] 

Rex  ex  rel.  Morton  v.  Roberts. 
Rex  ex  rel.  Morton  v.  Rymal. 


1912 

April  16 


Municipal  Elections — Township  Councillor  and  Deputy  Reeve — Qualifica- 
tion— Transfers  of  Qualifying  Properties  after  Election — Right  to 
Hold  Seats — Qualification  as  Mortgagees — Defect  in  Declarations — - 
Right  to  Make  Fresh  Declarations — Consolidated  Municipal  Act,  1903, 
secs.  76,  .219,  220,  311 — Procedure  in  Attacking  Right  to  Hold  Seats — 
Notice  of  Motion  in  Nature  of  Quo  Warranto — Time — Amendment. 

The  respondents  were  declared  elected  councillor  and  deputy  reeve  respect- 
ively of  a township.  Both  had  been  assessed  as  freeholders,  and  were 
admittedly  qualified  at  the  time  of  the  election.  The  councillor  elect 
made  an  absolute  conveyance  of  his  qualifying  property,  delivered  and 
registered  before  the  8th  January,  on  which  day  he  made  a declaration 
of  qualification  purporting  to  be  in  pursuance  of  sec.  311  of  the  Con- 
solidated Municipal  Act,  1903,  and  took  his  seat  as  councillor.  The 
declaration  omitted  the  word  “and”  between  the  words  “have”  and 
“had”  in  the  third  line  of  the  form  in  the  statute,  sec.  311 — thus  reading 
“I  hame  had  to  my  own  use  and  benefit  ...  at  the  time  of  my 
election  . . . such  an  estate  as  does  qualify  me,”  etc.  The  deputy 
reeve  elect  also  disposed  of  his  only  qualifying  property;  but  this  oc- 
curred after  he  made  the  declaration  and  took  his  seat.  The  declar- 
ation was  in  the  same  defective  form.  The  councillor  elect  took  as 
part  of  the  purchase-money  of  his  property  a mortgage  thereon  for 
$4,100,  and  the  deputy  reeve  elect  took  a mortgage  in  the  same  way  for 
$4,500:  — 

Held,  that  the  statute  lays  down  three  prerequisites  to  a de  jure  occupa- 
tion of  the  office:  (1)  possession  of  property  qualification;  (2)  election 
by  acclamation  or  otherwise;  (3)  making  the  declaration  prescribed; 
and  absence  of  any  one  of  these  will  prevent  the  seat  being  filled  de 
jure. 

And  held,  that  the  declarations  made  by  the  respondents  were  not  in  the 
form  nor  to  .the  same  effect  as  the  form  prescribed  by  the  statute;  and 
neither  respondent  was  de  jure  a member  of  the  council. 

Held , also,  that  the  relator  had  the  right  to  proceed  by  notice  of  motion 
in  the  nature  of  a quo  warranto,  under  secs.  :219  and  220  of  the  Muni- 
cipal Act,  1903,  to  attack  the  right  of  the  respondents  to  hold  their 
seats. 

Held,  also,  that,  as  the  facts  in  regard  to  the  transfers  of  the  properties 
and  the  form  of  the  declaration  came  to  the  knowledge  of  the  relator 
only  within  six  weeks  of  the  application,  he  was  in  time  under  the 
amendment  made  to  sec.  220  of  the  Act  of  1903,  by  7 Edw.  VII.  ch. 
40,  sec.  5. 

Held,  also,  that  the  notices  of  motion  should  be  amended  by  setting  up 
the  omission  to  make  the  statutory  declaration. 

Held,  also,  that,  if  the  respondents  could  now  make  the  declaration  re- 
quired by  sec.  311  of  the  Act,-  they  should  be  allowed  to  do  so,  and  so 
make  their  occupancy  of  the  offices  de  jure. 

Regina  ex  rel.  Clancy  V.  Conway  (1881),  46  U.C.R.  85,  followed. 

Held,  also,  that  the  respondents,  as  mortgagees  holding  the  legal  estate  in 
the  lands  which  they  had  conveyed,  although  not  mortgagees  in  posses- 
sion, had  the  qualification  required  by  sec.  76  of  the  Consolidated  Muni- 
cipal Act,  1903 — there  is  nothing  in  principle  or  authority  to  prevent 
a mortgagee  who  is  assessed  for  the  property  qualifying  on  his  legal 
estate. 

History  of  the  legislation  and  review  of  the  authorities. 


264 


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[VOL. 


Riddell,  J. 


1912 

Rex 

EX  REL. 

Morton 

v. 

Roberts. 


Appeals  by  the  respondents  from  orders  of  the  Junior  Judge 
of  the  County  Court  of  the  County  of  Wentworth  declaring  that 
the  respondents  had  lost  the  right  to  hold  their  seats  as  coun- 
cillor and  deputy  reeve  respectively  for  the  township  of  Barton, 
having  become  disqualified  since  their  election  to  those  offices. 

April  9.  The  appeals  were  heard  by  Riddell,  J.,  in 
Chambers. 

J.  G.  Farmer,  K.C.,  for  the  respondent  Roberts. 

A.  M.  Lewis,  for  the  respondent  Rymal. 

W.  A.  H.  Duff,  K.C.,  for  the  relator. 


April  16.  Riddell,  J.  • — At  the  recent  municipal  election  in  the 
township  of  Barton,  such  a number  of  nominations  were  made  as 
would  apparently  necessitate  a taking  of  votes ; but  at  the  pro- 
per time,  a sufficient  number  resigned  (Consolidated  Muni- 
cipal Act,  1903,  sec.  129  (2),  (3))  to  enable  the  clerk  (sec.  129 
(4))  to  declare  the  remaining  candidates  duly  elected.  Accord- 
ingly, Roberts  was  declared  elected  councillor  and  Rymal  deputy 
reeve. 

Roberts  had  been  assessed  as  freeholder  on  a certain  lot,  and 
was  admittedly  “ qualified”  at  the  time  of  the  election.  He, 
however,  by  deed  dated  the  5th  January,  registered  on  the  6th 
January,  conveyed  the  land  by  deed  absolute  to  one  McDonald, 
having  on  the  1st  January  taken  a mortgage  for  $4,100.  Not- 
withstanding this  transfer,  he  made  a declaration  of  qualifica- 
tion purporting  to  be  in  pursuance  of  sec.  311  of  the  Act  and 
amending  statutes,  on  the  8th  January,  and  upon  that  day  took 
his  seat  as  councillor,  and  still  continues  to  hold  it. 

The  declaration  omitted  the  word  “and”  between  the  words 
“have”  and  “had”  in  the  third  line  of  the  form  in  the  statute, 
sec.  311.* 

Upon  motion  before  His  Honour  Judge  Monck,  that  learned 
Judge  made  an  order  declaring  “that  the  said  Walter  Roberts 
hath  lost  his  right  to  hold  his  seat  as  a councillor  of  the  township 
of  Barton,  and  hath  become  disqualified  since  his  election  to  hold 
his  said  seat,  he  having  since  his  said  election  sold  and  disposed 
of  the  property  on  which  he  qualified,  and  not  being  otherwise 


* “.  . . have  and  had  to  my  own  use  and  benefit  ...  at  the  time  of 
my  election  to  the  office  . . . such  an  estate  as  does  qualify  me  to  act 

in  the  office ” 


XXVI.] 


ONTARIO  LAW  REPORTS. 


265 


qualified  or  possessing  the  necessary  qualification  required  by 
the  Consolidated  Municipal  Act,  1903,  and  amendments  thereto, 
and  said  seat  is  vacant. ’ ’ 

Rymal  had  also  been  assessed  for  certain  property,  and  ad- 
mitted was  duly  ‘ 4 qualified  ’ ’ at  the  time  of  the  election ; hut  he 
also  conveyed  his  property  by  deed  of  date  the  28th  December, 
affidavit  of  execution  the  6th  January,  registered  the  23rd  Janu- 
ary, on  which  day  the  transaction  was  completed  by  Rymal 
taking  a mortgage  for  $4,500  for  part  of  the  purchase-money 
and  handing  over  the  deed. 

The  learned  Judge  says  of  this  transaction : “ Rymal  also  dis- 
posed of  his  only  qualifying  property,  but  this  occurred  after 
he  took  the  oath  of  qualification  and  after  he  took  his  seat.” 
Rymal  made,  on  the  8th  January,  a declaration  in  the 
same  defective  form  as  that  made  by  Roberts,  and  took  his  seat 
as  deputy  reeve,  and  still  claims  it.  A motion  before  Judge 
Monck  resulted  in  a similar  order — each  respondent  was  ordered 
to  pay  costs. 

Both  Roberts  and  Rymal  now  appeal. 

The  learned  Judge  proceeded  on  the  ground  that  the  pro- 
perty qualification  of  a member  of  a municipal  council  was  a 
continuing  qualification;  and  that,  once  the  property  qualifica- 
tion originally  necessary  was  lost,  the  incumbent  of  the  office 
became  ipso  facto  disqualified. 

In  the  view  I take  of  the  case,  I do  not  think  I need  pass 
upon  that  question.  It  is,  however,  to  be  observed  that  from 
almost  the  very  earliest  times  the  qualification  has  been  express- 
ed to  be  that  entitling  a person  “to  be  elected.” 

The  first  general  Act  (1838),  1 Viet.  ch.  21,  providing  for 
the  election  of  certain  officers — clerk,  assessor,  collector,  etc.— has 
no  qualification  for  the  officer  to  be  elected,  although  it  has  for 
the  voter  (secs.  2,  4). 

The  Municipal  Act  of  1841,  4 & 5 Viet.  eh.  10,  sec.  11,  pro- 
vides that  “every  person  to  be  elected  a member  of  a District 
Council  . . . shall  be  seized  and  possessed,”  etc.,  etc. 

Baldwin’s  Act,  12  Viet.  ch.  81,  secs.  22,  57,  65,  83,  contains 
the  same  language;  the  Act  of  1858,  22  Viet.  (stat.  1)  ch.  99, 
which  is  the  same  as  (1859)  C.S.U.C.  ch.  54,  sec.  70,  also;  and  the 


Riddell,  J. 

1912 


Rex 

EX  EEL. 

Morton 

v. 

Roberts. 


266 


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Riddell,  J. 

1912 

Rex 

EX  REL. 

Morton 

v. 

Roberts. 


[VOL. 


terminology  appears  in  the  various  amendments  and  re-enact- 
ment down  to  the  present  Act  of  1903,  sec.  76.  Sometimes, 
indeed,  the  provision  is  negative,  as  at  present,  and  sometimes 
positive,  as  was  the  original  form — but,  whether  it  be  ‘‘no  per- 
son but,”  or  “every  person  who,”  it  is  always  “to  be  elected.” 

Language  quite  different  was  used  almost  from  the  first  in 
respect  of  certain  cases.  It  is  true  that  in  the  Act  4 & 5 Viet, 
ch.  10  it  was  provided  (sec.  12)  that  “no  person  ...  in  Holy 
Orders  or  . . . Minister  ...  of  any  religious  sect  . . 

nor  any  Judge  . . shall  be  qualified  to  be  elected  a councillor 

. . ;”  but  the  language  was  soon  changed.  In  the  Act  of 
1849,  by  sec.  132,  it  was  enacted  “that  no  Judge  . . . and  no 
person  having  . . . any  interest  ...  in  any  contract  with 
. . . the  Township  . . . shall  be  qualified  to  be  or  be  elected 
. . . councillor  . . .”  And  in  Baldwin’s  Act,  C.S.U.C. 

ch.  54,  sec.  73,  it  is  provided  that  such  person  shall  not  be 
qualified  “to  be  a member  of  the  Council  of  the  Corporation.” 
The  same  language  continues  down  to  the  present  Act,  sec.  80 

And,  in  like  manner,  the  Act  of  1849,  sec.  112,  provides 
that,  if  any  member  of  a municipal  council  ‘ ‘ be  declared  a bank- 
rupt ...  or  shall  compound  by  deed  with  his  creditors,  then 
. . . such  person  shall  . . . immediately  become  disquali- 

fied, and  shall  cease  to  he  a member  of  such  municipal  corpora- 
tion . . and  the  vacancy  thereby  created  . . . filled  as  in 
the  case  of  the  natural  death  of  such  member  . . .”  In  the 

C.S.U.C.  ch.  54,  sec.  121,  the  occasions  for  the  seat  becoming 
vacant  are  increased  in  number,  introducing  amongst  others  ‘ ‘ as- 
signs his  property  for  the  benefit  of  creditors” — and  so  it  has 
continued  to  the  present  time  (Consolidated  Municipal  Act, 
1903,  sec.  207),  appearing  in  substantially  the  same  words  in  the 
nine  or  ten  re-enactments  and  amendments. 

The  difference  in  the  terminology  affords  a very  cogent  argu- 
ment against  the  view  that  the  Legislature  intended  the  sale 
of  the  qualifying  property  to  operate  as  an  act  ipso  facto  dis- 
qualifying the  member,  at  all  events  after  proper  declaration 
of  qualification  made — had  that  been  the  intention,  it  is  difficult 
to  see  why  the  provision  that  an  assignment  for  the  benefit  of 


XXVI.] 


ONTARIO  LAW  REPORTS. 


267 


his  creditors  is  made  specifically  a ground  of  disqualification, 
without  the  addition  “a  sale  or  assignment  of  qualifying  pro- 
perty. ’ ’ 

So  in  the  Act  of  12  Viet.  ch.  81,  sec.  110,  it  is  provided  that 
the  absence  of  the  head  of  the  council  “vacates”  the  seat. 

On  the  other  hand,  a consideration  of  the  form  of  the  oath  or 
declaration  affords  a strong  argument  that  the  ownership  of  the 
property  qualification  must  continue — at  all  events  until  the  oath 
or  declaration  was  made.  And  this  will  appear  during  the 
consideration  of  the  forms  laid  down,  which  I shall  speak  of  in 
another  point  of  view.  For  I do  not  intend  to  decide  these  cases 
upon  the  ground  taken  by  the  County  Court  Judge. 

From  a very  early  period  it  has  been  a statutory  require- 
ment that  a councillor,  etc.,  should  make  a declaration  (or  take 
an  oath).  The  Act  of  1838  provides  for  a promissory  oath,  and 
it  was  to  be  made  (secs.  9,  36)  within  twenty  days  of  being  noti- 
fied of  election,  upon  penalty  of  a fine  of  £5.  But  the  Act  of 
1841  contained  a provision  “that  no  person  elected  a councillor 
. . . shall  be  capable  of  acting  as  such  until  he  shall  have  taken 
and  subscribed”  the  statutory  oath — and  he  was  given  (sec.  16) 
ten  days  after  notice  of  his  election  to  take  this  oath,  otherwise 
he  was  deemed  to  have  refused  the  office,  and  was  liable  to  a fine 
— his  office  was  deemed  vacant  and  a new  election  had.  The  oath 
is  not  only  promissory  (sec.  15),  but  also  “that  I am  seized  and 
possessed,  to  my  own  use,  of  lands,”  etc.,  and  that  such  “lands 
are  within  the  District  of  . . . and  are  of  the  real  value  of 

£300,”  etc.,  etc.  The  Baldwin  Act,  12  Viet.  ch.  81,  provides  (sec. 
129),  “that  every  person  who  shall  be  elected  ...  to  any 
office  which  requires  a qualification  of  property  . . . shall, 

before  he  shall  enter  into  the  duties  of  his  office,  take  and  sub- 
scribe an  oath  or  affirmation  to  the  effect  following,  fhat  is  to 
say:  ‘I,  A.  B.,  do  swear  . . . that  I am  truly  and  bond  fide 

seized  to  my  own  use  and  benefit  of  such  an  estate  (specifying  it) 
as  doth  qualify  me  to  act  in  the  office  of  (naming  it)  . . . 

according  to  the  true  intent  and  meaning  of  a certain  Act  of 
Parliament,’  ” etc.,  etc..  Note  that  in  these  earliest  qualifi- 
cation oaths  the  present  tense  is  used  in  speaking  of  the  owner- 


Riddell,  J. 

1912 

Rex 

EX  EEL. 

Morton 

v. 

Roberts. 


268 

Riddell,  J. 

1912 

Rex 
ex  REL. 
Mortox 

V. 

Roberts. 


ONTARIO  LAW  REPORTS.  [vol. 

ship,  and  also  (in  12  Yict.)  that  the  ownership  of  the  estate  doth 
qualify  to  act  in  the  office. 

The  language  in  22  Yict.  (stat.  1)  ch.  99,  sec.  175,  is,  “before 
he  . . . enters  on  his  duties  . . ;”  and  the  declaration  (a 

solemn  declaration  now  being  substituted  for  an  oath)  is  still, 
“lam  truly  and  loud  fide  seized  . . . doth  qualify  me  to  act 
in  the  office,”  etc. 

The  statute  29  & 30  Yict.  ch.  51,  sec.  178,  makes  no  change 
from  the  language  of  the  Consolidated  Statute — the  Act  of  1873, 
36  Yict.  ch.  48,  sec.  211,  brings  in  the  form  still  in  use — “have 
and  had  to  my  own  use  and  benefit  ...  as  proprietor  . . . 
at  the  time  of  my  election  to  the  office  of  . . . does  qualify 
me  to  act  . . . ” — precisely  the  same  as  the  form  in  the 
statute  of  1903,  sec.  311  (the  word  “proprietor”  being  used  in- 
stead of  “owner”),  but  without  the  addition  made  by  (1906)  6 
Edw.  VII.  ch.  34,  sec.  10. 

The  statute,  in  my  view,  lays  down  three  prerequisites  to  a 
de  jure  occupation  of  the  office  (I  do  not  pause  to  inquire  as 
to  others)  : (1)  possession  of  property  qualification;  (2)  election 
by  acclamation  or  otherwise;  (3)  making  the  declaration  pre- 
scribed. Absence  of  any  one  of  these  will  prevent  the  seat  being 
filled  de  jure — absence  of  one  or  all  will  not,  of  course,  prevent 
it  being  filled  de  facto. 

“Where  the  statute  requires  a prescribed  oath  of  office  before 
any  person  elected  1 shall  act  therein / a person  cannot- justify 
as  such  officer  unless  he  has  taken  an  oath  in  substantial,  not 
necessarily  literal,  compliance  with  the  law:”  Dillon  on  Muni- 
cipal Corporations,  5th  ed.,  sec.  395,  and  American  cases  cited 
in  note  1,  at  bottom  of  p.  680. 

In  The  King  v.  Swyer  (1830),  10  B.  & C.  486,  the  capital 
burgesses  and  common  council  of  Shafton  were  authorised  to 
elect  one  of  the  burgesses  each  year  to  be  mayor.  The  charter 
provided  that  “he  who  . . . shall  be  elected  . . . mayor 

. . . before  he  be  admitted  to  execute  that  office,  or  in  any 

way  to  intermeddle  in  "the  same  office,  shall  . . . take  . . . 
all  the  oaths  by  the  laws  . . . appointed  . . . and  that 
after  such  oath  so  taken,  he  can  and  may  execute  the  office  of 
. . . mayor  . . .”  Lord  Tenterden,  C.J.  (p.  491)  : “A  party 


XXVI.] 


ONTARIO  LAW  REPORTS. 


269 


becomes  mayor  not  merely  by  reason  of  his  being  elected,  but 
of  being  sworn  into  office.”  Bayley,  J.  (pp.  491,  492)  : “By  the 
clause  authorising  the  election  of  a mayor,  the  capital  burgesses 
are  to  elect  and  nominate  one  of  the  burgesses  to  be  mayor : and 
he,  before  he  executes  his  office,  is  to  be  sworn  in.  He  becomes 
the  head  of  the  corporation  not  when  he  is  elected  and  nomin- 
ated, but  when  he  is  sworn  in.”  It  will  be  seen  that  no  point  is 
made  of  the  clause  in  the  charter  that  ‘ ‘ after  s*uch  oath  so  taken, 
he  can  and  may  execute  the  office  of  . . . mayor,”  which  is 

the  only  point  of  differentiation  between  the  Shafton  charter 
and  our  statute  in  that  regard. 

In  The  King  v.  Mayor,  etc.,  of  Winchester  (1837),  7 A.  & E. 
215,  the  language  of  the  statutes  (9  Geo.  IV.  ch.  17,  secs.  2,  4,  and 
5,  and  5 & 6 Wm.  IV.  ch.  76,  sec.  50)  is  a little  different,  but  not 
substantially  so — and  Lord  Denman,  C.J.  (p.  221),  clearly  shews 
that  it  is  the  making  of  the  declaration  that  constitutes  the 
acceptance  of  the  office.  See  also  per  Littledale,  J.,  at  p.  222. 

In  a case  under  our  own  statute,  upon  language  identical 
with  that  in  the  present  statute,  Cameron,  J.  (afterwards  Sir 
Matthew  Cameron,  C.J.),  said:  “I  am  of  opinion  that  until  a 
person  elected  a member  of  a municipal  corporation  has  made 
the  declaration  of  qualification  prescribed  by  the  265th  section 
of  ch.  174,  RjS.O.  1877,  he  has  no  right  to  exercise  or  dis- 
charge the  functions  pertaining  to  the  office : ’ ’ Regina  ex  rel. 
Clancy  v.  St.  Jean  (1881),  46  U.C.R.  77,  at  p.  81.  On  p.  81  the 
learned- Judge  continues:  “I  think  there  can  be  no  doubt  that 
this  declaration  is  an  essential  prerequisite  to  the  discharge  of 
the  duties  of  the  office  of  alderman.  ’ ’ In  the  case  of  Regina  ex 
rel.  Clancy  v.  Conway  (1881),  46  U.C.R.  85,  at  p.  86,  the  same 
learned  Judge  gave  (in  a certain  event,  which  will  be  considered 
later)  leave  to  file  an  information  in  the  nature  of  a quo  ivar- 
ranto,  “on  the  ground  that  without  making  the  declaration  of 
qualification  he  (Conway)  illegally  exercises  the  franchises  of 
the  office.” 

Such  cases  as  United  States  v.  Bradley  (1836),  10  Peters  343, 
are  quite  different,  as  they  determine  only  that  an  appointment 
in  the  nomination  of  the  President,  upon  confirmation  by  the 
Senate  of  the  United  States,  becomes  an  absolute  appointment, 


Riddell,  J. 

1912 

Rex 

ex  REL. 
Morton 

v. 

Roberts. 


19 — XXVI.  O.L.R. 


270 


ONTARIO  LAW  REPORTS. 


Riddell,  J. 

1912 

Rex 

EX  REL. 

Morton 

v. 

Roberts. 


[VOL. 

vesting  the  office  in  the  nominee  upon  appointment  by  the  Presi- 
dent and  confirmation  by  the  Senate,  although  the  nominee  has 
not  given  the  bond  which  a statute  requires  him  to  give  for  the 
security  of  the  Government.  Compare.  United  States  Bank  v. 
Dandridge  (1827),  12  Wheat.  64. 

It  can  scarcely  be  seriously  argued  that  the  declaration  taken 
is  “to  the  effect”  of  the  form  in  the  statute.  As  we  have  seen, 
the  earliest  form  of  declaration  of  qualification  was  in  the  oath 
in  sec.  129  of  the  Act  of  12  Yict. : “I  am  truly  and  bond  fide,” 
etc.;  and  this  continued  until  the  Act  of  1873.  At  that  time  it 
seems  to  have  been  considered  proper  to  make  sure  that  the 
declarant  had  been,  at  the  time  of  the  election,  properly  quali- 
fied— 'and  not  simply  was  possessed  of  the  property  qualifica- 
tion at  the  time  of  the  declaration.  It  might  happen  that  one 
not  really  having  the  property  qualification  would  offer  himself 
for  election,  and,  if  elected,  buy  property  for  his  qualification. 
But  from  the  very  first  the  present  tense  is  found  somewhere  in 
the  oath — and  it  is  wholly  absurd  to  suggest  or  argue  that  declar- 
ing. “I  have  had  property,”  etc.,  is  to  the  same  effect  as  declar- 
ing, “I  have  and  had  property,”  etc. 

It  must  be  held  that  neither  respondent  is  de  jure  a member 
of  the  council. 

We  have  next  to  consider  whether  the  present  procedure  is 
open  to  the  relator — and  two  strong  cases  at  first  sight  seem  ad- 
verse; but  I think  the  apparent  difficulty  will  disappear  when 
the  course  of  the  legislation  is  examined.  In  Regina  ex  rel. 
Grayson  v.  Bell  (1865),  1 U.C.L.J.  N.S.  130,  it  was  alleged  that 
the  candidate’s  declaration  was  not  proper,  but  that  it  set  out 
property  of  which  in  fact  he  was  not  the  owner.  Hagarty,  J. 
(afterwards  Sir  John  Hagarty,  C.J.O.),  refused  a writ  of  sum- 
mons in  the  nature  of  a quo  warranto . 

So,  also,  in  Regina  ex  rel..  Hoisted  v.  Ferris  (1870),  6 U.'C. 
L.J.  N.S.  266,  Mr.  Dalton,  C.C.  & P.,  refused  to  unseat  Perris, 
on  the  ground  alleged  that  the  declaration  made  by  him  was 
insufficient,  saying:  “Nothing  can  be  made  of  this  objection  on 
this  application.  Whatever  might  be  the  effect  of  the  omission 
to  describe  the  nature  of  the  estate  on  a quo  warranto  at  common 
law,  it  affords  no  ground  for  declaring,  in  this  statutory  pro- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


271 


ceeding,  that  the  election  was  not  legal,  or  was  not  conducted 
according  to  law,  or  that  the  person  declared  elected  thereat 
was  not  duly  elected.  ’ ’ 

The  common  law  writ  of  quo  warranto — sometimes  called 
quo  jure — was  used  by  the  King  to  call  upon  any  subject  who 
exercised  office  or  a franchise,  to  shew  by  what  authority  the 
office  or  franchise  was  enjoyed — it  might  also  be  used  by  the 
King  to  call  upon  one  who  held  land,  to  shew  by  what  title  or 
warrant  he  held.  The  right  to  such  a writ  rested,  of  course,  upon 
the  principles  that  the  King  has  the  sole  power  of  bestowing 
offices  and  franchises  and  he  is  lord  paramount  of  all  land  within 
the  kingdom.  The  writ,  which  was  an  original  writ  out  of 
Chancery,  fell  into  disuse  early,  probably  in  the  times  of  Richard 
II.  (Coke,  2 Inst.  498,  etc.),  and  an  information  in  the  nature  of 
a quo  warranto  took  its  place.  This  was  much  abused  in  Stewart 
times,  but  has  survived;  and  still  may  be  put  in  action  in  a 
proper  case — it  lies  against  persons  who  claim  any  office,  fran- 
chise, or  privilege  of  a public  nature,  and  not  merely  ministerial 
and  held  at  the  will  and  pleasure  of  others : Darley  v.  The  Queen 
(1845),  12  Cl.  & F.  520. 

As  it  was  held  that  at  the  common  law  the  King  alone 
could  have  such  an  information  against  those  usurping  offices, 
etc.,  in  municipal  corporations,  the  statute  9 Anne  ch.  20  was 
passed,  providing  for  the  issue  of  such  informations  at  the  in- 
stance of  private  prosecutors  in  such  cases — and  this  statute 
became  part  of  our  law  by  the  Provincial  Act,  32  Geo.  III.  ch.  1. 

Both  in  England  and  in  Upper  Canada,  the  practice  in  such 
cases  has  been  simplified : the  statutory  provisions  are  in  cases 
covered  by  the  statutes  now  taken  advantage  of — but,  if  there  be 
any  casus  omissus,  the  information  under  the  Statute  of  Anne 
may  be  still  appealed  to.  In  our  own  Courts,  the  most  recent 
case  I know  of  is  Regina  ex  rel.  Moore  v.  Nagle  (1894),  24  O.R. 
507.  Askew  v.  Manning  (1876),  38  U.C.R.  345,  is  another  case. 

By  the  Act  of  12  Viet.  ch.  81,  sec.  146,  it  was  provided  “that 
at  the  instance  of  any  relator  having  an  interest  as  a candidate 
or  voter  in  any  election  ...  a writ  of  summons,  in  the  nature 
of  a quo  warranto,  shall  lie  to  try  the  validity  of  such  election, 
which  writ  shall  issue  out  of  His  Majesty’s  Court  of  Queen’s 


Riddell,  J. 

1912 


Rex 

EX  REL. 

Morton 

v. 

Roberts. 


272 

Riddell,  J. 

1912 


Rex 

EX  REL. 

Morton 

v. 

Roberts. 


ONTARIO  LAW  REPORTS.  [vol. 

Bench  . . . upon  such  relator  shewing  upon  affidavit  . . . 
reasonable  grounds  for  supposing  that  such  election  was  not 
conducted  according  to  law,  or  that  the  party  elected  or  returned 
thereat  was  not  duly  or  legally  elected  or  returned.’ ’ Thence- 
forward, the  writ  of  summons  was  used  instead  of  the  informa- 
tion in  the  nature  of  a quo  warranto  in  cases  to  which  it  was 
applicable. 


When  the  case  Regina  ex  rel.  Grayson  v.  Bell , 1 U.C.L.J.  N.S. 
130,  was  decided  (in  1865),  the  statute  in  force  was  the  C.S.U.C. 
1859,  ch.  54,  which  provided  (sec.  128  (1))  that,  “If  . . . the 
relator  shews  by  affidavit  to  any  such  Judge,  reasonable  grounds 
for  supposing  that  the  election  was  not  legal  or  was  not  con- 
ducted according  to  law,  or  that  the  person  declared  elected 
thereat  was  not  duly  elected  . . . the  Judge  shall  direct  a 

writ  of  summons  in  the  nature  of  a quo  warranto  to  be  issued  to 
try  the  matters  contested.”  The  only  matters  which  could  be 
thus  contested  were  (sec.  127),  “the  right  of  any  municipality  to 
a reeve  or  deputy  reeve,  or  . . . the  validity  of  the  election  or 
appointment  of  a mayor,  warden,  reeve,  deputy  reeve,  aider- 
man,  councilman,  councillor  or  police  trustee.”  It  is  in  view 
of  the  provisions  of  the  then  existing  statute  that  Hagarty,  J., 
says:  “As  Bell  was  properly  qualified,  and  nothing  is  alleged 
against  the  manner  of  his  election,  I do  not  see  how  I can  inter- 
fere by  quo  warranto , because  an  apparent  mistake”  [the  re- 
port by  a clerical  error  reads  “no  apparent  mistake”]  “has  been 
made  in  the  description  of  the  nature  of  an  estate  in  pro- 
perty. . . .” 


In  1870,  when  Regina  ex  rel.  Hoisted  v.  Ferris,  6 U.C.L.J. 
N.S.  266,  was  decided,  the  Act  in  force  was  (1866)  29  & 30  Yict. 
ch.  51 ; the  provisions  for  a writ  of  summons  in  the  nature  of 
a quo  warranto,  and  the  description  of  the  matters  that  could  be 
tried  under  such  a writ,  are  totidem  verbis  et  Uteris  the  same  as 
in  the  C.S.U.C. : see  29  & 30  Yict.  ch.  51,  secs.  130,  131. 

The  statute  36  Yict.  ch.  48,  secs.  131,  132,  was  the  same,  and 
also  R.S.O.  1877,  ch.  174,  secs.  179,  180,  which  last  contained  the 
statutory  enactments  when  the  two  cases  of  Regina  ex  rel.  Clancy 
v.  St.  Jean  and  Regina  ex  rel.  Clancy  v.  Conway,  46  U.C.R.  77, 
85,  came  on.  And  it  was  due  to  the  limited  class  of  cases  for  the 


XXVI.] 


ONTARIO  LAW  REPORTS. 


273 


application  of  the  statutory  procedure  that  iu  these  cases  an 
information,  and  not  a writ  of  summons  in  the  nature  of  a quo 
warranto,  was  applied  for. 

In  1892,  by  sec.  188  of  the  statute  55  Yict.  ch.  42,  a notice  of 
motion  in  the  nature  of  a quo  warranto  was  substituted  for  a 
writ  of  summons  : and  this  practice  has  continued  to  the  present 
time;  the  statute  60  Yict.  ch.  15,  schedule  C (44),  struck  out  in 
the  beginning  all  reference  to  the  right  of  a municipality  to  a 
reeve  or  deputy  reeve;  and  3 Edw.  YII.  ch.  18,  sec.  32,  made 
a most  important  change:  “In  case  the  validity  of  the  election 
or  the  appointment  or  the  right  to  hold  the  seat  of  a mayor, 
warden,  reeve,  alderman,  county  councillor  or  councillor  is 
contested,”  etc.  etc.  Before  that  time  it  was  only  the  validity 
of  the  election  which  could  be  challenged  in  the  statutory  method 
—thereafter  the  right  to  hold  a seat  could  be  attacked  in  the 
same  way.  Section  33  made  a corresponding  change  in  the 
material  to  be  presented  to  the  Judge  upon  application  in  the 
first  instance.  The  consolidation  of  1903,  3 Edw.  YII.  ch.  19, 
sec.  219,  followed,  and  that  Act  has  been  slightly  amended  by  6 
Edw.  YII.  ch.  35,  sec.  26,  and  9 Edw.  YII.  ch.  73,  sec.  5 (1). 

The  scope  of  the  statutory  remedy  being  extended  to  cover 
the  case  of  a contest  as  to  a deputy  reeve’s  and  a councillor’s 
right  to  sit,  there  can  be  no  doubt  that  the  practice  followed 
here  is  proper. 

It  would  seem  that  the  facts,  as  to  the  transfer  of  the  pro- 
perty, and  I suppose  the  form  of  the  declaration,  came  to  the 
knowledge  of  the  relator  only  within  six  weeks  of  the  applica- 
tion ; and,  consequently,  he  is  in  time  under  the  amendment  made 
to  sec.  220  of  the  Consolidated  Municipal  Act,  1903,  by  the  stat- 
ute of  1907,  7 Edw.  YII.  ch.  40,  sec.  5. 

The  form  of  notice  of  motion  is : “ Take  notice  that  by  leave 
of  His  Honour  Judge  Monck,  Junior  Judge  of  the  County  Court 
of  the  County  of  Wentworth,  a motion  will  be  made  on  behalf 
of  the  above  named  John  E.  Morton,  of  the  township  of  Barton, 
in  the  county  of  Wentworth,  dairyman,  and  an  elector  entitled 
to  vote  at  a municipal  election  in  the  said  township  of  Barton, 
before  the  presiding  Judge  in  Chambers,  at  .the  court  house  in 
the  city  of  Hamilton,  on  the  8th  day  after  the  day  of  service 


Riddell,  J. 


1912 

Rex 

EX  REL. 
Morton 
v. 

Roberts. 


274 


ONTARIO  LAW  REPORTS. 


[VOL. 


Riddell,  J. 

1912 


Rex 

ex  REL. 

Morton 

v. 

Roberts. 


of  this  notice  on  yon  (excluding  the  day  of  service),  at  the  hour 
of  eleven  o’clock  in  the  forenoon,  or  so  soon  thereafter  as  the 
motion  can  be  heard,  for  an  order  declaring  that  the  said  Frank 
E.  Rymal,  the  above-named  defendant,  hath  lost  his  right  to 
hold  his  seat  as  deputy  reeve  of  the  township  of  Barton,  and 
has  become  disqualified  since  his  election  to  hold  his  said  seat, 
he  having  since  his  said  election  sold  and  disposed  of  the  pro- 
perty on  which  he  qualified,  and  not  being  otherwise  qualified'  or 
possessing  the  necessary  property  qualification  required  by  the 
Consolidated  Municipal  Act,  1903,  and  amendments  thereto.” 


The  statute  provides  (sec.  221  (2))  that  “the  relator  shall, 
in  his  notice  of  motion,  . . . state  specifically,  under  distinct 

heads,  all  the  grounds  of  objection  to  the  validity  of  the 
election  complained  against,  and  in  favour  of  the  validity  of 
the  election  of  the  relator,  or  other  person  or  persons,  where 
the  relator  claims  that  he  or  they,  or  any  of  them,  have  been 
duly  elected,  on  the  grounds  of  forfeiture  or  disqualification, 
as  the  case  may  he.”  This  is  from  3 Edw.  VII.  ch.  19,  sec.  221, 
and  makes  no  reference  to  a case  in  which  the  validity  of  the 
election  is  not  complained  of  and  no  claim  is  made  for  the 
election  of  some  one  else — as  in  the  present  case.  Accordingly, 
I think  the  notice  of  motion  may  he  amended  by  setting  up  the 
omission  to  make  the  statutory  declaration.  Section  226  does 
not  apply  for  the  same  reason — or,  if  it  be  considered  that  the 
first  part  applies  on  the  mutatis  mutandis  principle,  so  does  the 
second — and  I think  it  eminently  a case  where  “the  Judge  in 
his  discretion”  should  “entertain  any  substantial  ground  of 
objection  to”  the  right  to  hold  the  seat. 

The  mere  fact  that  a proper  declaration  has  not  been  made 
does  not  in  itself  compel  the  Court  to  declare  the  seat  vacant. 
In  Regina  ex  rel.  Clancy  v.  Conway,  46  U.C.R.  85,  Cameron, 
J.,  gave  leave  to  the  defendant  to  make  the  same  within  ten 
days,  if  he  could;  and  he  says  in  the  other  case,  46  U.C.R.  at  p. 
82:  “As  the  latter”  ( i.e the  person  elected)  “can  at  any  time 
put  himself  in  a position  to  exercise  the  franchises  of  the  office 
by  making  a proper  declaration,  his  omission  to  make  the  de- 
claration would  not  render  the  office  vacant.”  This  was  a case 
of  an  imperfect  declaration. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


275 


The  form  of  the  declaration  contemplates  that  the  declarant 
shall  have,  at  the  time  of  making*  the  declaration,  the  qualifica- 
tion : no  Court  would  allow  a person  to  make  a declaration 
which  was  false  and  so  commit  an  indictable  offence : Criminal 
Code,  sec.  175.  And,  of  course,  no  one  with  any  sense  of  self- 
respect  would  desire  to  make  a false  declaration. 

Prom  very  early  times  the  refusal  to  make  the  declaration 
was  held  equivalent  to  a refusal  of  the  office,  even  if  the  party 
was  incapable  of  making  it:  Attorney -General  v.  Read  (1678), 
2 Mod.  299;  Starr  v.  Mayor,  etc.,  of  Exeter  (1683),  3 Lev.  116; 
affirming  S.  C.,  2 Show.  158;  Rex  v.  Larwood  (1693),  Carthew 
306. 

« 

If  the  elected  can  now  make  the  declaration  required  by  sec. 
311,  then,  under  Regina  ex  rel.  Clancy  v.  Conway,  ut  supra , 
they  should  be  allowed  to  do  so,  and  so  make  their  occupancy  of 
the  offices  de  jure,  as  it  is  now  de  facto. 

The  position  of  a mortgagee  is  well  understood : he  has  the 
legal  estate  in  the  land,  holding  the  legal  estate  and  the  land 
as  security  for  his  debt.  Is  this  legal  estate  sufficient? 

The  early  statutes  do  not  employ  the  terminology  now  in  use. 

In  1 Yict.  eh.  21,  there  is  no  qualification  prescribed : but  in 
4 & 5 Viet.  eh.  10,  sec.  11,  one  to  be  elected  must  “be  seized  and 
possessed  to  his  own  use,  in  fee,  of  lands  and  tenements  within 
the  district  ...  of  the  real  value  of  £300  currency,  over  and 
above  all  charges  and  incumbrances  due  and  payable  upon  or 
out  of  the  same.”  Under  12  Yict.  eh.  81,  sec.  22,  no  one  could 
be  elected  township  councillor  “who  shall  not  have  been  entered 
upon  the  . . . roll  as  assessed  for  ratable  real  property  held 

in  his  own  right  ...  as  proprietor  or  tenant,  to  the  value 
of  £100  . . ;”  and  under  sec.  57  no  one  could  be  elected  a 

village  councillor  “who  shall  not  be  possessed,  to  his  own  use,  of 
real  estate  held  by  him  in  fee  or  freehold,  or  for  a term  of 
twenty-one  years  or  upwards  ...  of  the  assessed  value  of' 
£250  . . Section  65  contains  language  similar  to  that  of 
sec.  57 ; while  sec.  83  provides  for  the  qualification  of  an  aider- 
man — “seized,  to  his  own  use,  of  real  estate  held  by  him  in  fee 
simple,  or  in  freehold  . . of  the  assessed  value  of  £500  . 

In  1858,  22  Yict.  (stat.  1)  ch.  99,  sec.  70,  a change  was  made — 


Riddell,  J. 

1912 

Rex 

EX  REL. 

Morton 

v. 

Roberts. 


276 


ONTARIO  LAW  REPORTS. 


Riddell,  J. 

1912 

Rex 

EX  REL. 

Morton 

V. 

Roberts. 


[VOL. 

“have  ...  in  their  own  right  or  in  the  right  of  their  wives, 
as  proprietors  or  tenants,  freehold  or  leasehold  property  rated 
. . . to  at  least  the  value  . . .” 

By  the  last  Act  before  Confederation,  29  & 30  Viet.  ch.  51, 
sec.  70,  another  change  was  made — “have  ...  in  their  own 
right  or  in  the  right  of  their  wives,  as  proprietors  or  tenants,  a 
legal  or  equitable  freehold  or  leasehold,  rated  . . .”  There 

must  have  been  some  reason  for  introducing  the  expression 
“legal  or  equitable.”  * 

In  the  consolidation  of  1873,  36  Viet.  ch.  48,  sec.  71,  another 
change  was  made — “have  ...  in  their  own  right,  or  in  the 
right  of  their  wives,  as  proprietors  or  tenants,  a legal  or  equit- 
able freehold  or  leasehold,  or  partly  legal  and  partly  equitable, 
rated  . . .”  This  language  is  unaltered  in  R.S.O.  1877,  ch. 
174,  sec.  70:  46  Viet.  ch.  18,  sec.  73;  but  49  Viet.  ch.  37,  sec.  2, 
changes  it  to  “legal  or  equitable  freehold  or  leasehold,  or  partly 
freehold  and  partly  leasehold,  or  partly  legal  and  partly  equit- 
able;” and  this  reappears  in  50  Viet.  ch.  29,  sec.  2,  R.S.O.  1887, 
ch.  184,  sec.  73;  55  Viet.  ch.  42,  sec.  73.  The  revisers  in  1897, 
under  the  powers  given  by  60  Viet.  ch.  3,  sec.  3,  changed  the 
wording  into  its  present  form;  and  the  Legislature  adopted  it 
as  R.S.O.  1897,  ch.  223,  sec.  76;  and  now  it  appears  as  Consoli- 
dated Municipal  Act,  1903,  3 Edw.  VII.  ch.  19,  sec.  76 — the 
amendment,  6 Edw.  VII.  ch.  35,  sec.  5,  not  affecting  this  part  of 
the  section. 

I think  that  the  Legislature  must  have  had  in  view  the 
difference  between  legal  and  equitable  estates : and  that  the 
language  now  employed,  differing  as  it  does  from  that  formerly 
used,  must  Le  given  full  effect  to. 

What  estate  then  had  Rymal  at  the  time  of  the  election,  and 
what  estate  has  he  now  ? 

At  the  time  of  the  election,  it  is  plain  that  he  had  the  legal 
estate,  and  that  such  legal  estate  was  then  worth  not  only  the 
$4,500  for  which  the  mortgage  was  subsequently  taken,  but  also 
the  amount  of  cash  paid  by  the  mortgagor  as  well.  At  the  pre- 
sent time,  it  is  equally  plain  that  he  has  the  legal  estate  in  the 
land — that,  the  mortgage  being  in  fee,  this  is  a freehold,  a 
‘ ‘ legal  freehold.  ’ ’ This  could  be  mortgaged  or  sold  at  any  time ; 


XXVI.] 


ONTARIO  LAW  REPORTS. 


277 


and,  while  it  is  indeed  in  equity  but  a security  for  the  debt,  it  is 
a valuable  security — and  worth  $4,500.  At  the  time  of  taking 
the  imperfect  declaration,  there  is  no  question  that  he  could 
have  made  the  declaration  in  proper  form  (owning  as  he  did  the 
whole  estate,  and  the  sale  being  still  in  fieri,  and  it  not  appear- 
ing that  there  was  any  enforceable  contract  for  sale).  Whether 
he  can  now  make  the  declaration  must  be  determined  by  the 
very  words  of  the  declaration  itself.  Leaving  out  the  (for  this 
inquiry)  unimportant  words,  it  reads  thus:  “I  . . do  solemnly 
declare  . . that  I have  and  had  to  my  own  use  and  benefit  . . 
as  owner  at  the  time  of  my  election  such  an  estate  as  does  qualify 
me  to  act  in  the  office  of  deputy  reeve  for  . . . and  that  such 
estate  is  (specifying  it)  and  that  such  estate  at  the  time  of  my 
election  was  of  the  value  of  at  least,”  etc.,  etc.  It  is  to  be  noted 
that  the  value  at  the  time  of  making  the  declaration  is  not  re- 
quired to  be  set  out. 


Riddell,  J. 


1912 

Rex 

EX  REL. 

Morton 

v. 

Roberts. 


At  the  time  of  the  election  he  had  a legal  estate  worth 
$4,500  and  more — no  equitable  estate  had  been  carved  out  of  it — 
now  he  has  the  very  same  legal  estate,  but  it  is  worth  only  $4,500, 
for  an  equitable  estate  has  been  created  cutting  down  the  value. 
I think  that,  employing  the  language  of  sec.  76,  Rymal  “has,  as 
owner,  a legal  freehold  which  is  assessed  in  his  own  name  on 
the  last  revised  assessment  roll  of  the  municipality  to  at  least 
the  value  of  $4,500.” 

But  it  is  argued  that  mortgagees  cannot  be  considered 
persons  contemplated  by  the  statute — and  that  they  cannot 
qualify  unless  they  are  in  possession.  The  rule  that  mortgagees 
should  not  vote  unless  they  are  in  possession,  so  far  as  it  exists 
at  all,  is  statutory — and  an  examination  of  the  statutes  rather 
furnishes  us  with  an  argument  that  mortgagees  have  the  same 
rights  as  to  voting,  etc.,  as  any  other  owner  of  a freehold  unless 
they  are  expressly  excluded.  The  first  Act  is  (1696),  7 & 8 Wm. 
III.  ch.  25,  which,  by  sec.  7,  provides  that  “no  person  or  persons 
shall  be  allowed  to  have  any  vote  in  election  of  members  to  serve 
in  Parliament,  for  or  by  reason  of  any  trust  estate  or  mortgage, 
unless  such  trustee  or  mortgagee  be  in  actual  possession  or 
receipt  of  the  rents  and  profits  of  the  same  estate ; but  that  the 
mortgagor,  or  cestui  que  trust,  in  possession,  shall  and  may  vote 


278 


ONTARIO  LAW  REPORTS. 


[VOL. 


Riddell,  J. 


1912 


Rex 

EX  EEL. 

Morton 


v. 

Roberts. 


for  the  same  estate,  notwithstanding  such  mortgage  or  trust  . 

As  it  was  only  freeholders  who  were  given  the  right  to  vote,  it 
seems  to  me  that  Parliament  considered  a mortgagee  a free- 
holder, and  considered  that  he  would  have  the  right  to  vote, 
unless  specially  legislated  against.  The  same  provision  exclud- 
ing mortgagees  and  trustees  not  in  possession  appears  in  (1832) 
2 Wm.  IV.  ch.  45,  sec.  23,  and  in  (1843)  6 & 7 Viet.  ch.  18,  sec. 
74. 

There  are  cases  in  which  a mere  trustee  had  been  held  not 
entitled  to  vote — e.g.,  South  Grenville  Election,  Jones’s  Case 
(1872),  H.E.C.  163,  at  p.  176 : but  that  wTas  because  of  the  words 
‘ 1 in  his  own  right  ’ ’ — shewing  that  it  was  a real  beneficial  owner- 
ship that  was  required  by  the  statute. 

I can  find  nothing  in  principle  or  authority  to  prevent  a 
mortgagee  who  is  assessed  for  the  property  qualifying  on  his 
legal  estate. 

The  same  considerations  apply  also  to  Roberts. 

If  they  make  a proper  declaration,  within  ten  days,  their 
appeals  will  be  allowed — but  without  costs  here  or  below.  They 
are  given  an  indulgence  in  being  allowed  to  make  now  a declara- 
tion which  should  have  been  made  three  months  ago,  and  with- 
out which  they  had  no  right  to  their  seats.  It  would  seem  neces- 
sary again  to  call  attention  to  the  necessity  of  observing  the 
plain  directions  of  the  statutes,  the  forms  prescribed,  etc. 

If  the  declaration  be  not  made  by  either  within  ten  days,  the 
appeal  of  that  one  will  be  dismissed  with  costs. 

While  it  is,  in  my  view,  probable  that  there  is  no  necessity 
for  the  relator  to  file  an  affidavit  that  the  facts  as  to  the  defect 
in  the  declaration  came  to  his  knowledge  only  within  six  weeks 
before  the  notice  of  motion  was  served,  he  will  he  permitted  to 
do  so,  if  so  advised,  for  the  greater  caution  in  case  of  an  appeal 
from  this  decision,  or  in  case  either  of  the  respondents  fails  to 
make  the  proper  declaration. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


279 


[TEETZEL,  J.] 

National  Trust  Co.  v.  Trusts  and  Guarantee  Co. 

• 

Company — Winding-up — Realisation  of  Assets — Claim  by  Trustee  for  Bond- 
holders under  Mortgage  Given  to  Secure  Bonds — Mortgage  Covering  Per- 
sonal Property — Invalidity  for  Want  of  Registration — Bills  of  Sale  and 
Chattel  Mortgage  Act , secs.  2,  5,  23 — Agreement  not  to  Register — Book- 
debts — Validity  of  Transfer  without  Registration — Absence  of  Notice  to 
Debtors — Status  of  Liquidator  to  Contest  Claim — Representation  of 
Creditors — Jus  Tertii — Parties. 

An  incorporated  manufacturing  and  trading  company  made  a mortgage  to 
the  plaintiff,  as  trustee  for  bondholders,  to  secure  payment  of  its  bonds,  of 
“its  undertakings  then  made  or  in  course  of  construction  or  thereafter  to 
be  constructed,  together  with  all  the  properties,  real  or  personal,  tolls,  in- 
comes, and  sources  of  money,  rights,  privileges,  and  franchises,  owned, 
held,  or  enjoyed  by  it.”  The  lands  were  specifically  set  out  in  the  mort- 
gage-deed; and  it  was  “declared  and  agreed,  for  the  purpose  of  this 
mortgage  security,  that  all  machinery,  plant,  and  personal  property  of 
the  company  are  to  be  considered  fixtures  to  the  realty.  . . . This 

mortgage  is  not  to  be  registered  as  a bill  of  sale  or  chattel  mortgage.” 
The  company  made  an  assignment  for  the  benefit  of  creditors;  and  a 
winding-up  order  was  afterwards  made,  under  which  the  defendant  was 
appointed  liquidator;  the  defendant  then  took  possession  of  all  the 
assets,  and  realised  such  as  were  convertible.  The  plaintiff  claimed  the 
assets  under  the  mortgage,  and  brought  this  action  for  an  account,  or, 
in  the  alternative,  for  damages  for  conversion:- — 

Held,  that,  as  the  charge  upon  the  company’s  real  and  personal  property 
was  not  created  by  the  bonds,  but  by  the  mortgage,  the  latter  was,  so  far 
as  it  purported  to  charge  personal  property,  a “mortgage  or  conveyance 
intended  to  operate  as  a mortgage  of  goods  and  chattels,  within  the 
meaning  of  secs.  2 and  23  of  the  Bills  of  Sale  and  Chattel  Mortgage  Act, 
R.S.O.  1897,  ch.  148;  and,  not  having  been  accompanied  by  an  immediate 
delivery  and  an  actual  and  continued  change  of  possession  of  the  things 
mortgaged,  and  not  having  been  registered  as  a chattel  mortgage,  was,  as 
such,  under  sec.  5 of  the  Act,  “absolutely  null  and  void  as  against  credi- 
tors of  the  mortgagor.” 

Johnston  v.  Wade  (1908),  17  O.L.R.  372,  distinguished. 

Semble,  that,  as  a chattel  mortgage,  it  was  also* void  ab  initio  as  against 
creditors,  by  reason  of  the  agreement  that  it  should  not  be  registered 
under  the  Bills  of  Sale  and  Chattel  Mortgage  Act:  Clarkson  v.  McMaster 
& Co.  (1895),  25  S.C.R.  96,  105,  106. 

Held,  also,  that,  although  the  mortgage-deed  did  not  specifically  mention 
present  or  future  book-debts,  the  language  above-quoted  was  sufficient  to 
create  an  equitable  charge  on  present  and  future  book-debts;  that  book- 
debts  are  not  within  the  Bills  of  Sale  and  Chattel  Mortgage  Act,  and  a 
transfer  of  them  does  not  require  registration;  and,  therefore,  that  as 
to  any  book-debts  that  were  unpaid  at  the  date  of  the  assignment  by  the 
company,  the  plaintiff  was  entitled  to  recover  the  amount  that  was 
realised  therefrom  by  the  assignee  or  the  defendant;  and  that  the  fact 
that  no  notice  of  the  charge  was  given  by  the  plaintiff  to  the  debtors  did 
not  alter  that  right. 

Thibaudeau  v.  Paul  (1894),  26  O.R.  385,  and  Re  Perth  Flax  and  Cordage 
Co.  (1909),  13  O.W.R.  1140,  specially  referred  to. 

Held,  also,  that  the  liquidator,  being  from  the  beginning  primd  facie  law- 
fully in  possession  of  the  property  in  question  as  an  officer  of  the  Court, 
and  being  charged  with  the  duty  of  applying  the  proceeds  in  payment 
of  the  company’s  creditors  in  due  course  of  administration,  was  entitled, 
in  right  of  the  creditors  of  the  company,  to  contest  the  validity  of  the 
plaintiff’s  mortgage  and  to  maintain  in  defence  of  the  action  the  superior 
claim  of  the  creditors  whom  it  represented;  and  it  was  not  necessary  to 
have  one  of  the  creditors  added  as  a party. 

Re  Canadian  Camera  and  Optical  Co.  (1901),  2 O.L.R.  677,  679,  followed. 


1912 
April  17 


280 


ONTARIO  LAW  REPORTS. 


Teetzel,  J. 

1912 

National 
Trust  Co. 
v. 

Trusts 

and 

Guarantee 

Co. 


[VOL. 

Action  by  the  National  Trust  Company  Limited,  trustee  for 
the  bondholders  of  the  Raven  Lake  Portland  Cement  Company, 
against  the  Trusts  and  Guarantee  ‘Company  Limited,  liquidator 
of  the  Raven  Lake  Portland  Cement  Company,  for  an  account 
of  the  proceeds  of  certain  goods  and  chattels,  book-debts  and 
choses  in  action,  alleged  to  have  been  converted  and  sold  and 
collected  by  the  defendant,  or,  in  the  alternative,  for  damages 
for  conversion.  See  Be  Raven  Lake  Portland  Cement  Co., 
National  Trust  Co.  v.  Trusts  and  Guarantee  Co.  (1911),  24 
O.L.R.  286. 

March  11.  The  action  was  tried  before  Teetzel,  J.,  without 
a jury,  at  Toronto. 

B.  C.  H.  Cassels,  for  the  plaintiff. 

W.  Laidlaw,  K.C.,  for  the  defendant. 

April  17,  Teetzel,  J. : — The  plaintiff  is  trustee  for  bond- 
holders of  the  Raven  Lake  Portland  Cement  Company,  herein- 
after referred  to  as  the  company,  and  the  defendant  is  liquida- 
tor of  that  company  under  the  Dominion  Winding-up  Act. 

By  mortgage  dated  the  13th  September,  1904,  the  com- 
pany duly  granted,  assigned,  transferred  and  conveyed  and 
mortgaged  to  the  plaintiff  in  trust,  subject  to  a certain  other 
mortgage,  all  and  singular  its  undertakings  then  made  or  in 
course  of  construction  or  thereafter  to  be  constructed,  together 
with  all  the  properties,  real  or  personal,  tolls,  incomes,  and 
sources  of  money,  rights,  privileges,  and  franchises,  owned,  held, 
or  enjoyed  by  it  then  or  at  any  time  prior  to  the  full  payment 
of  the  bonds  thereby  secured,  to  secure  payment  of  the  bonds 
mentioned  in  the  mortgage,  amounting  to  $50,000,  and  interest. 
The  lands  are  specifically  set  out  in  a schedule  attached  to  the 
mortgage.  The  mortgage  also  purports  to  cover  ‘ ‘ all  machinery 
of  every  nature  and  kind,  including  all  tools  and  implements 
used  in  connection  therewith,  which  are  now  or  which  may  here- 
after, during  the  currency  of  this  mortgage,  be  brought  upon  the 
said  lands  or  into  any  of  the  buildings  thereon,  including  all 
machinery  used  or  to  be  used  in  the  manufacture  of  cement  and 
plant  and  tools  connected  therewith.  . . . The  dredge  at 

Raven  Lake,  the  machinery,  tools,  etc.,  to  be  deemed  fixtures  for 


XXVI.] 


ONTARIO  LAW  REPORTS. 


281 


the  purpose  of  this  mortgage,  whether  the  same  shall  be  actually 
affixed  to  the  said  lands  or  buildings  or  not.” 

The  23rd  and  24th  clauses  read  as  follows : ‘ ‘ And  it  is  further 
hereby  declared  and  agreed,  for  the  purpose  of  this  mortgage 
security,  that  all  machinery,  plant,  and  personal  property  of 
the  company  are  to  be  considered  fixtures  to  the  realty.  And 
it  is  expressly  understood  and  agreed  that  this  mortgage  is  not 
to  be  registered  as  a bill  of  sale  or  chattel  mortgage.  Provided 
and  it  is  hereby  declared  that  the  company  may  at  all  times,  so 
long  as  there  is  no  default  in  payment  of  principal  or  interest 
on  the  said  bonds  or  otherwise  hereunder,  sell  and  dispose  of 
its  manufactured  products  in  the  ordinary  course  of  business, 
free  from  the  lien  of  this  mortgage.” 

Each  bond,  a copy  of  which  is  set  forth  in  the  mortgage,  con- 
tains this  clause:  “This  bond  is  one  of  a series  amounting  in  the 
aggregate  to  $50,000,  and  is  secured  by  a mortgage  duly  ex- 
ecuted according  to  law  conveying  to  the  National  Trust  'Com- 
pany Limited  as  trustee  all  the  present  and  future  real  and 
personal  properties,  rights,  franchises,  and  powers  of  the  Raven 
Lake  Portland  Cement  Company  Limited,  as  by  reference  to 
the  said  mortgage  will  more  fully  appear;  the  nature  of  the 
security,  the  rights  of  the  holders  of  the  bonds  secured  by  it, 
and  the  terms  of  the  trust  appear  by  the  said  mortgage,  to  which 
reference  is  hereby  expressly  directed,  and  which  terms  are  made 
a part  of  this  bond.” 

The  mortgage  contains  the  usual  provisions  for  redemption, 
and  that  until  default  the  mortgagors  shall  be  permitted  “to 
possess,  operate,  manage,  use,  and  enjoy  the  mortgaged  premises, 
and  to  take  and  use  the  rents,  incomes,  profits,  and  issues  thereof, 
in  the  same  manner  and  to  the  same  extent  as  if  these  presents 
had  not  been  executed.” 

It  also  contains  elaborate  provisions  enabling  the  mortgagee, 
upon  default,  to  take  possession  and  operate  or  sell  the  mort- 
gaged premises. 

The  mortgage  was  duly  registered  against  the  lands  covered 
thereby,  but  was  not  filed  as  a chattel  mortgage,  nor  was  any- 
thing done  to  comply  with  secs.  2,  3,  or  23  of  the  Bills  of  Sale 
and  Chattel  Mortgage  Act,  as  from  the  beginning  the  plaintiffs 


Teetzel,  J. 

1912 

National 
Trust  Co. 
v. 

Trusts 

AND 

Guarantee 

Co. 


282 


Teetzel,  J. 

1912 

National 
Trust  Co. 
v. 

Trusts 

and 

Guarantee 

Co. 


ONTARIO  LAW  REPORTS.  [vol. 

assumed  that  the  provisions  of  that  Act  did  not  apply  to  the 
mortgage. 

On  the  14th  September,  1907,  the  company  made  a general 
assignment  for  the  benefit  of  its  creditors  to  Henry  R.  Morton, 
who  entered  into  possession  as  assignee,  and  proceeded  to  realise 
upon  the  personal  estate  of  the  company. 

By  order  dated  the  20th  September,  1907,  made  under  the 
Dominion  Winding-up  Act,  the  company  was  declared  to  be 
insolvent  and  ordered  to  be  wound  up,  the  defendant  appointed 
provisional  liquidator,  and  a reference  directed  to  Mr.  Mc- 
Andrew,  an  Official  Referee,  to  appoint  a permanent  liquidator, 
and  to  take  all  necessary  proceedings  for  and  in  connection  with 
the  winding-up  of  the  company.  On  the  30th  November,  1907, 
the  defendant  was  appointed  permanent  liquidator. 

The  appointment  of  liquidator  having  superseded  that  of 
the  assignee,  the  former  took  possession  of  all  the  assets  of  the 
company,  and  proceeded  to  convert  the  same  into  money  and  to 
collect  outstanding  accounts  and  generally  to  administer  the 
affairs  of  the  company. 

By  the  8th  September,  1909  (the  date  of  the  liquidator’s 
statement  of  receipts  and  disbursements),  the  defendant  had  ap- 
parently realised  upon  all  the  convertible  assets  of  the  company ; 
and,  so  far  as  I can  judge  from  the  statement,  those  assets  con- 
sisted chiefly  of  manufactured  cement,  sacks*  for  cement,  coal, 
book-accounts,  and  cash  received  from  the  assignee  as  proceeds 
of  goods  sold  and  book-debts  collected,  before  he  handed  the 
estate  over  to  the  defendant.  It  does  not  appear  that  machinery 
or  anything  in  the  nature  of  fixtures  was  realised  upon  by  the 
defendant. 

By  letter  of  the  9th  November,  1907,  the  plaintiff  gave  the 
defendant  notice  of  the  mortgage,  stating  that  it  covered  all  the 
property  of  the  company,  and  was  in  default,  but  no  steps  were 
taken  to  recover  the  goods  and  chattels  then  in  the  defendant’s 
possession,  or  their  proceeds,  till  October,  1909,  when  the  plain- 
tiff served  a notice,  in  the  winding-up  proceedings,  claiming  all 
the  proceeds  of  the  assets  of  the  company  realised  by  the  de- 
fendant as  liquidator,  and  all  other  assets  (if  any)  which  may 
be  unrealised  in  the  hands  of  the  liquidator,  upon  the  ground 


XXVI.] 


ONTARIO  LAW  REPORTS. 


283 


that  all  such  assets  belonged  to  the  plaintiff  by  virtue  of  the 
above-recited  mortgage. 

Nothing  appears  to  have  been  done  under  this  notice  until 
the  28th  September,  1910,  when  joint  objections  to  the  plain- 
tiff’s claim  were  filed  and  served  by  the  defendant  and  the  Im- 
perial Plaster  Company  Limited,  the  latter  “on  behalf  of  them 
selves  and  all  other  creditors  of  the  Raven  Lake  Portland  Cement 
Company  Limited,”  upon  the  ground,  among  others,  that  the 
mortgage  was  void  for  non-compliance  with  the  Bills  of  Sale  and 
Chattel  Mortgage  Act,  and  that  the  assets  were  not  covered  by 
the  mortgage.  Instead  of  adjudicating  upon  the  claim  and  the 
objections  thereto,  the  learned  Referee,  on  the  3rd  November, 
1910,  granted  leave  to  issue  a writ  and  prosecute  an  action 
against  the  defendant  “in  respect  of  goods  and  chattels  and 
book-debts  and  choses  in  action  formerly  belonging  to  the  Raven 
Lake  Portland  Cement  Company  Limited,  or  the  proceeds 
thereof,  claimed  by  the  National  Trust  Company  Limited.” 

This  action  was  accordingly  brought,  but  it  is  to  be  observed 
that  the  other  contestant,  the  Imperial  Plaster  Company  Limi- 
ted, was  neither  made  a party  to  the  action,  nor  was  its  objec- 
tion adjudicated  upon  by  the  Referee. 

An  application  was  made  to  the  Master  in  'Chambers  by  the 
defendant  to  have  that  company  added  as  a party  defendant, 
but  the  motion  was  refused,  and  the  refusal  was  sustained  on 
appeal,  without  prejudice  to  an  application  being  made  to  the 
trial  Judge,  if  it  should  appear  to  him  that  the  proposed  de- 
fendant is  a necessary  party  to  enable  him  to  adjudicate  upon 
the  title  to  the  money  in  question. 

The  statement  of  claim  sets  forth  the  mortgage,  alleges  de- 
fault and  non-payment,  and  charges  that,  notwithstanding  the 
plaintiff’s  rights  under  the  mortgage,  the  defendant  took  pos- 
session of  certain  goods  and  chattels,  the  property  of  the  said 
company  and  subject  to  the  plaintiff’s  mortgage,  and  sold  the 
same,  and  also  collected  certain  book-debts  and  choses  in  action, 
the  property  of  the  said  company,  and  wrongfully  converted  the 
same  to  its  own  use,  and  refused  to  deliver  the  same  or  account 
for  the  proceeds  thereof  to  the  plaintiff ; and  the  plaintiff  claims 


Teetzel,  J. 

1912 

National 
Trust  Co. 

y. 

Trusts 

AND 

Guarantee 

Co. 


284 

Teetzel,  J. 

1912 

National 
Trust  Co. 
v. 

Trusts 

AND 

Guarantee 

Co. 


ONTARIO  LAW  REPORTS.  [vol. 

an  account  of  the  same,  or,  in  the  alternative,  damages  for  con- 
version of  the  said  goods,  chattels,  and  book-accounts. 

The  defendant  pleads  the  winding-up  proceedings,  disclaims 
any  personal  right  or  interest  in  the  property,  denies  unlawful 
conversion,  submits  that  the  Imperial  Plaster  Company  Limited, 
on  behalf  of  itself  and  all  other  creditors,  should  he  added  as  a 
party  defendant,  and  repeats  the  objections  to  the  plaintiff’s 
claim  set  forth  in  the  notice  of  contestation  above  referred  to. 

The  following  questions  arise  for  determination: — 

(1)  Does  the  mortgage  hind  the  goods  and  chattels  in  ques- 
tion notwithstanding  the  provisions  of  the  Bills  of  Sale  and 
Chattel  .Mortgage  Act? 

(2)  Does  the  mortgage  hind  the  book-accounts  in  question, 
or  any  of  them? 

(3)  Is  the  defendant,  as  liquidator,  entitled  to  contest  the 
plaintiff’s  claim  on  the  ground  that  the  provisions  of  the  Bills  of 
Sale  and  Chattel  Mortgage  Act  were  not  complied  with? 

(4)  If  the  defendant  is  not  so  entitled,  should  the  Imperial 
Plaster  Company  Limited  be  added  as  a party  defendant? 

Upon  the  first  question,  counsel  for  the  plaintiff  submits  that 
the  mortgage  creates  a floating  security,  and  as  such  extends  to 
all  personal  property  of  the  company,  whether  existing  at  the 
date  of  the  mortgage  or  subsequently  acquired,  and  relies  upon 
the  decision  in  Johnston  v.  Wade  (1908),  17  O.L.R.  372,  to  sup- 
port his  argument  that  the  provisions  of  the  Bills  of  Sale  and 
Chattel  Mortgage  Act  are  not  applicable  to  this  mortgage. 

In  that  case  there  was  not,  as  in  this  case,  a mortgage  to 
secure  bonds;  but  the  bonds,  upon  their  face  and  in  the  condi- 
tions endorsed  upon  them  (see  p.  390),  declared  that  all  the 
company’s  “ property,  real  and  personal,  rights,  powers,  and 
assets  of  every  kind  and  description,  present  and  future,  includ- 
ing its  uncalled  capital,”  were  charged  with  the  payment  of  the 
bonds.  The  decision  in  that  case  was,  that  such  bonds,  issued 
pursuant  to  a by-law  passed  under  the  provisions  of  the  Com- 
panies Act,  then  R.S.O.  1897,  ch.  191,  sec.  49,  were  not  mort- 
gages of  goods  and  chattels  of  an  incorporated  company  within 
the  meaning  of  the  Bills  of  Sale  and  Chattel  Mortgage  Act,  and 
were  not,  therefore,  void  as  against  the  defendant,  the  assignee  of 


XXVI.] 


ONTARIO  LAW  REPORTS. 


285 


the  company  for  the  benefit  of  creditors,  because  not  registered 
under  the  provisions  of  that  Act.  After  reviewing  the  authori- 
ties in  England  which  hold  that  such  debentures  need  not  be 
registered  under  the  English  Bills  of  Sale  Act  in  order  to  be 
effective  against  other  creditors,  and  referring  to  the  language 
of  sec.  2 of  the  Bills  of  Sale  and  Chattel  Mortgage  Act,  R.S.O. 
1897,  ch.  148?  the  Chief  Justice  of  Ontario  (p.  386)  observes: 
“The  words  ‘mortgage  or  conveyance  intended  to  operate  as 
a mortgage  of  goods  and  chattels’  describe  instruments  of  a 
well-known  character.  They  do  not  convey  the  idea  of  deben- 
tures of  the  kind  in  question  here,  which  pass  no  property  in 
the  goods  and  chattels  to  the  holder,  and  confer  upon  him  no 
right  to  take  possession  of  them  or  interfere  with  them  in  any 
way,  except  through  the  interposition  of  the  Court.  It  seems 
plain  that  such  an  instrument  was  not  within  the  meaning  of 
the  Act  or  in  the  mind  of  its  framers,  as  it  stood  prior  to  the 
passing  of  sec.  23.  That  section,  as  amended  by  4 Edw.  VII. 
ch.  10,  sec.  36,  provides  that  ‘in  the  case  of  a mortgage  or  con- 
veyance of  goods  and  chattels  of  any  incorporated  company 
made  to  a bondholder  or  bondholders  or  to  a trustee  or  trustees 
for  the  purpose  of  securing  the  bonds  or  debentures  of  such 
company,’  the  affidavit  of  bona  fides  may  be  made  as  therein 
prescribed.  Here  again  the  difficulty  presents  itself  that  the 
section  applies  only  to  a mortgage  or  conveyance  of  goods  and 
chattels.  And  on  its  face  it  seems  to  exclude  a bond  or  deben- 
ture simply.  It  deals  with  the  case  of  a mortgage  or  convey- 
ance made  for  the  purpose  of  securing  the  bonds  or  debentures 
of  a company;  and  enacts  (amongst  other  things)  that  the  affi- 
davit may  be  made  by  the  mortgagee  or  one  of  the  mortgagees, 
all  which  seems  quite  inapplicable  to  bonds  or  debentures  by 
themselves.”  Mr.  Justice  Osier,  at  p.  388,  says:  “Section  23  of 
the  Act  shews  how  far  the  Legislature  intended  to  go  in  dealing 
with  instruments  for  securing  the  bonds  or  debentures  of  a 
company.  The  only  instruments  of  that  class  which  are  re- 
quired to  be  registered  are  mortgages  or  conveyances  of  goods 
and  chattels  made  to  a bondholder  or  trustee  for  the  purpose  of 
securing  the  bonds  or  debentures  of  the  company— instruments, 
as  I understand  the  section,  of  the  some  character  as  those  men- 


Teetzel,  J. 

1912 

National 
Trust  Co. 

v. 

Trusts 

and 

Guarantee 

Co. 


20 — XXVI.  O.L.R. 


286 


ONTARIO  LAW  REPORTS. 


[VOL. 


Teetzel,  J. 

1912 

National 
Trust  Co. 
v. 

Trusts 

and 

Guarantee 

Co. 


tioned  in  other  sections  of  the  Act,  something  quite  different 
from  the  security  by  way  of  floating  charge  which  the  Com- 
panies Act  enables  a company  to  create  by  the  bonds  them- 
selves.” Mr.  Justice  Meredith,  at  p.  390,  says:  “ There  was  no 
mortgage  given  for  securing  payment  of  these  bonds,  but  they, 
upon  their  face  and  in  the  conditions  endorsed  on  them,  declared 
that  all  the  company’s  1 property,  real  and  personal,  rights, 
powers,  and  assets  'of  every  kind  and  description,  present  and 
future,  including  its  uncalled  capital,’  were  charged  with  the 
payment  of  the  bonds.  That  the  bonds  are  not  mortgages,  or 
conveyances  intended  to  operate  as  mortgages,  of  goods  and 
chattels,  within  the  provisions  of  the  Bills  of  Sale  and  Chattel 
Mortgage  Act,  I cannot  but  think  plain : they  are  neither  in  form 
nor  in  substance  such  a mortgage.  Under  them  no  title  to  the 
property  in,  or  right  to  possession  of,  the  chattels  passed  to  the 
bondholders:  a charge  upon  the  chattels  and  other  the  pro- 
perty of  the  company  was  created,  giving  them  priority  of  pay- 
ment out  of  the  assets  of  the  company.” 

The  validity  and  effect  of  what  is  called  a “floating  charge” 
on  the  property,  both  present  and  future,  of  a company,  has 
been  the  subject  of  much  judicial  consideration  in  England. 
The  cases  are  collected  and  discussed  in  Palmer’s  Company 
Law,  9th  ed.,  pp.  307-311,  where  it  is  pointed  out  that  it  has  been 
well-settled  by  the  authorities  that  a floating  charge  is  valid  as 
against  execution  and  general  creditors,  whether  in  a winding- 
up  or  otherwise,  and  retains  its  floating  character,  unless  other- 
wise agreed,  until  a receiver  is  appointed  or  a winding-up 
commences. 

As  to  the  injustice  to  subsequent  execution  creditors  arising 
from  the  nature  of  a floating  security  as  defined  by  the  authori- 
ties, see  observations  of  Buckley,  J.,  in  In  re  London  Pressed 
Hinge  Co.,  [1905]  1 Ch.  576,  at  p.  583;  also  the  dissenting  judg- 
ment of  Garrow,  J.A.,  in  Johnston  v.  Wade,  17  O.L.R.  at  p.  392 
et  seq. 

The  English  Companies  Act,  1908,  sec.  93,  providing  for 
registration  of  floating  charges  and  declaring  them  void  as 
against  creditors  unless  registered,  would  appear  to  remove  the 
danger  of  injustice  to  other  creditors,  in  England ; and  it  may  be 


XXVI.] 


ONTARIO  LAW  REPORTS. 


287 


that  our  statute-law  should  also  be  amended,  in  view  of  the  hold- 
ing in  Johnston  v.  Wade,  by  declaring  them  void  against  credi- 
tors unless  registered  under  sec.  78  of  the  Ontario  Companies 
Act,  1907. 

As  pointed  out  by  the  Chief  Justice  of  Ontario,  in  Johnston 
v.  Wade , at  p.  386,  the  English  cases,  “ turning  as  they  do  upon 
the  terms  of  legislation  which  is  not  the  same  as  our  provincial 
legislation,  afford  but  little  assistance,  and  in  the  last  analysis 
we  must  have  recourse  to  the  language  of  the  Acts  of  our  own 
Legislature;”  and  the  judgment  in  that  case  is  clearly  based 
on  the  conclusion  that  a debenture  qn  its  face  charging  the 
property  of  a company  with  its  payment  was  not  a “mortgage 
or  conveyance  intended  to  operate  as  a mortgage  of  goods  and 
chattels,”  within  the  meaning  or  comtemplation  of  our  Bills  of 
Sale  and  Chattel  Mortgage  Act. 

That  case  is,  therefore,  differentiated  from  this  case  by  the 
fact  that  in  this  case  the  bonds  do  not  create  the  charge,  but  a 
mortgage  is  given  which  creates  the  charge  in  favour  of  a trustee 
for  the  bondholders;  and,  although  it  embraces  the  company’s 
real  as  well  as  its  personal  property,  I think  that,  so  far  as  it 
purports  to  charge  personal  property,  it  is  clearly  a “mortgage 
or  conveyance  intended  to  operate  as  a mortgage  of  goods  and 
chattels,”  within  the  meaning  of  secs.  2 and  23  of  our  Bills  of 
Sale  and  Chattel  Mortgage  Act;  and,  not  having  been  accom- 
panied by  an  immediate  delivery  and  an  actual  and  continued 
change  of  possession  of  the  things  mortgaged,  and  not  having 
been  registered  as  a chattel  mortgage,  is,  as  such,  under  sec.  5 
of  the  Act,  “absolutely  null  and  void  as  against  creditors  of  the 
mortgagor.  ” 

As  a chattel  mortgage,  it  was  also  void  ab  initio  as  against 
creditors,  according  to  the  view  of  the  late  Chief  Justice  Strong 
in  Clarkson  v.  McMaster  & Co.  (1895),  25  S.C.R.  96,  at  pp.  105- 
6,  by  reason  of  the  agreement  that  it  should  not  be  registered 
under  the  Bills  of  Sale  and  Chattel  Mortgage  Act. 

Then,  as  to  the  book-debts,  it  is  well  settled  that  they  are  not 
within  the  Bills  of  Sale  and  Chattel  Mortgage  Act,  and  that  a 
transfer  of  them  does  not  require  registration : Kitching  v.  Hicks 


Teetzel,  J. 

1912 

National 
Trust  Co. 
v. 

Trusts 

and 

Guarantee 

Co. 


288 

Teetzel,  J. 

1912 

National 
Trust  Co. 

v. 

Trusts 

and 

Guarantee 

Co. 


ONTARIO  LAW  REPORTS.  [vol. 

(1884),  6 0. R.  739;  Tailby  v.  Official  Receiver  (1888),  13  App. 
Cas.  523;  Thibaudeau  v.  Paul  (1894),  26  O.R.  385. 

While  the  mortgage  in  question  does  not  specifically  mention 
present  or  future  hook-debts,  I think  the  language  “ under- 
takings . . . together  with  . . . incomes,  and  sources  of 

money,  rights,  privileges  . . . held  or  enjoyed  by  it  now  or 

at  any  time  prior  to  the  full  payment,”  etc.,  is  sufficiently  com- 
prehensive to  create  an  equitable  charge  on  present  and  future 
book-debts.  In  Re  Perth  Flax  and  Cordage  Co.  (1909),  13 
O.W.R.  1140,  where  the  language  of  the  chattel  mortgage  was 
“all  property,  real  and  personal,  that  shall  hereafter  be  ac- 
quired and  owned  by  the  company,”  it  was  held  that  these 
words  were  amply  sufficient  to  include  future  book-debts.  A 
charge  created  by  such  general  language  as  that  employed  in 
this  mortgage  attaches,  I think,  to  the  subject  charged,  in  the 
varying  condition  it  happens  to  be  from  time  to  time.  See 
Governments  Stock  and  Other  Securities  Investment  Co.  v. 
Manila  R.W.  Co.,  [1897]  A.C.  81,  at  p.  86;  and  Buckley's  Com- 
panies Acts,  9th  ed.,  pp.  230,  231. 

I am  of  opinion,  therefore,  that  as  to  any  book-debts  that 
were  unpaid  at  the  date  of  the  assignment  by  the  company,  the 
plaintiff  is  entitled  to  recover  the  amount  that  was  realised  there- 
from by  the  assignee  or  the  defendant;  and  that  the  fact  that 
no  notice  of  the  charge  was  given  by  the  plaintiff  to  the  debtors 
does  not,  as  argued  by  Mr.  Laidlaw,  alter  that  right.  Upon  this 
point,  Thibaudeau  v.  Paul  {supra).,  Re  Perth  Flax  and  Cordage 
Co.  {supra),  and  Eby-Blain  Co.  v.  Montreal  Packing  Co.  (1908), 
17  O.L.R.  292,  are,  I think,  conclusive. 

The  question  of  the  right  of  the  defendant  as  liquidator  to 
contest  the  plaintiff's  claim  under  the  mortgage,  and  to  hold 
the  proceeds  of  the  chattel  property  for  the  benefit  of  the  credi- 
tors, has  given  me  much  trouble ; but  I have  arrived  at  the  con- 
clusion that  the  defendant  has  that  right,  and  that  it  is  not 
necessary,  for  the  purpose  of  adjudicating  upon  the  title  to  the 
fund  in  question,  to  add  the  Imperial  Plaster  Company  as  a 
defendant.  Under  sec.  33  of  the  Winding-up  Act,  the  liquida- 
tor, upon  his  appointment,  ‘ ‘ shall  take  into  his  custody  or  under 
his  control,  all  the  property,  effects  and  choses  in  action  to  which 


XXVI.] 


ONTARIO  LAW  REPORTS. 


289 


the  company  is  or  appears  to  be  entitled.”  Having  done  this, 
further  general  duties  are,  as  stated  in  Palmer’s  Company  Law, 
9th  ed.,  p.  395,  “to  make  out  the  requisite  lists  of  contributories 
and  of  creditors,  to  have  disputed  cases  adjudicated  upon,  to 
realise  the  assets,  and  to  apply  the  proceeds  in  payment  of  the 
company’s  debts  and  liabilities,  in  due  course  of  administration, 
and,  having  done  that,  to  divide  any  surplus  amongst  the  con- 
tributories, and  to  adjust  their  rights.” 

While  the  title  of  the  estate  of  the  company  does  not,  under 
the  Act,  vest  in  the  liquidator,  it  must  clearly  be  his  duty,  as  an 
officer  of  the  Court,  when  he  has  in  his  custody  property  to 
which  the  company  appears  to  be  entitled,  to  protect  that  pro- 
perty for  the  benefit  of  the  creditors  who  may  be  interested 
therein.  Now,  when  the  defendant,  as  liquidator,  took  posses- 
sion of  the  property  in  question,  which  was  then  in  the  posses- 
sion of  the  company’s  assignee  for  creditors,  it  was  property  to 
which,  within  the  meaning  of  sec.  33,  the  company  or  its  assignee 
for  creditors  “appeared  to  be  entitled.” 

Had  the  liquidator  given  up  this  property  or  its  proceeds, 
either  when  notified  of  the  plaintiff’s  mortgage  or  when  the  pro- 
perty was  demanded,  without  submitting  to  the  Court  the  claim 
on  behalf  of  creditors  to  the  effect  that  the  plaintiff’s  mortgage 
was  void  as  against  them,  the  liquidator  would,  I think,  have 
committed  a gross  breach  of  duty.  When  the  claim  was  pre- 
sented, by  the  plaintiff,  the  liquidator  joined  with  a creditor 
on  behalf  of  all  other  creditors  of  the  company  in  contesting 
it,  under  secs.  85  to  90  of  the  Act.  Instead  of  submitting  to  a 
summary  disposition  of  the  matter  before  the  Official  Referee, 
the  plaintiff  elected,  upon  leave  of  the  Court,  to  bring  this 
action  against  the  liquidator  only. 

In  Re  Canadian  Camera  and  Optical  Co.  (1901),  2 O.L.R. 
677,  at  p.  679,  Street,  J.,  observes:  “It  is  necessary  to  bear  in 
mind  the  position  in  which  a liquidator  stands  in  a compulsory 
winding-up,  viz.,  that,  while  in  no  sense  an  assignee  for  value 
of  the  company,  yet  he  stands  for  the  creditors  of  the  company, 
and  is  entitled  to  enforce  their  rights,  because  their  right  to  pro- 
secute actions  themselves  against  the  company  and  to  recover 
their  claims  directly  out  of  the  property  of  the  company  is  taken 
away  by  the  Winding-up  Act.” 


Teetzel,  J. 

1912 

National 
Trust  Co. 
v. 

Trusts 

and 

Guarantee 

Co. 


290 


ONTARIO  LAW  REPORTS. 


Teetzel,  J. 

1912 

National 
Trust  Co. 
v. 

Trusts 

and 

Guarantee 

Co. 


[VOL. 

Being,  therefore,  from  the  beginning,  primd  facie  lawfully 
in  possession  of  the  property  in  question,  as  an  officer  of  the 
Court,  and  being  charged  with  the  duty  of  applying  the  pro- 
ceeds in  payment  of  the  company’s  creditors  in  due  course  of 
administration,  I hold  that  the  defendant  is  entitled,  in  right 
of  the  creditors  represented  by  it  as  liquidator,  to  contest  in  this 
action  the  validity  of  the  plaintiff’s  mortgage. 

Under  the  circumstances  found  in  this  case,  the  liquidator  is, 
I think,  entitled  to  maintain  in  defence  of  the  action  the  super- 
ior claim  of  the  creditors  whom  it  represents. 

Discussing  the  defence  of  jus  tertii,  it  is  stated  in  Clerk  & 
Lindsell  on  Torts,  3rd  ed.,  p.  252,  that,  “if  the  plaintiff  makes 
out  a good  primd  facie  title  by  possession  or  otherwise,  the  de- 
fendant must  in  the  first  place  impeach  that  title  by  shewing 
that  there  is  a better  right  in  some  one  else.  That  better  right 
may  be  in  himself  or  in  some  person  under  whose  authority  he  is 
acting,  or  under  whom  he  claims,  and  in  such  a case  he  clearly 
has  a good  defence,  for  a man  cannot  be  guilty  of  trespass  or 
conversion  in  respect  of  goods  to  the  possession  of  which  he  is 
entitled.  ’ ’ 

Here  the  defendant’s  position  is  strengthened  by  the  fact 
that,  at  the  time  of  the  action,  the  primd  facie  title  by  possession 
was  in  the  defendant.  See,  further,  as  to  defence  of  title  of  third 
party,  Richards  v.  Jenkins  (1886),  17  Q.B.D.  544,  affirmed  in 
(1887),  18  Q.B.D.  451. 

Judgment  will  be  in  favour  of  the  plaintiff  for  payment  by 
the  defendant  of  all  money  realised  from  book-debts  outstanding 
and  unpaid  at  the  date  of  the  'assignment,  the  14th  September, 
1907,  but  dismissing  the  balance  of  the  plaintiff’s  claim,  and 
declaring  that  the  mortgage  was  as  a chattel  mortgage  void  as 
against  the  creditors  of  the  company.  No  costs  of  action  to  either 
party,  but  the  defendant’s  costs  will  be  paid  out  of  the  balance 
of  the  fund,  as  between  solicitor  and  client. 

If  the  parties  cannot  ag-ree  upon  the  amount  to  be  paid  to 
the  plaintiff,  there  will  be  a reference  to  the  Master  in  Ordinary, 
with  costs  of  such  reference  reserved  until  after  the  Master’s 
report. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


291 


[MEREDITH,  C.J.C.P.] 

Townsend  v.  Northern  Crown  Bank. 

Banks  and  Banking — Securities  Taken  by  Bank  under  sec.  90  of  Bank  Act 
— Securities  upon  Sawn  Lumber — Wholesale  Dealer — “Products  of  the 
Forest” — “And  the  Products  thereof” — Bank  Act,  sec.  88(1) — Assign- 
ment for  Benefit  of  Creditors — Securities  Given  within  Sixty  Days — 
Continuation  of  Former  Securities — Assignment  of  Building  Contracts 
— Lumber  Used  in  Building — Assignment  of  Book-debts. 

The  words  “and  the  products  thereof,”  in  sub-sec.  2 of  sec.  74  of  the  Bank 
Act,  53  Viet.  ch.  31  (now,  with  some  immaterial  changes,  sub-sec.  1 of 
sec.  88  of  RjS.C.  1900,  ch.  29),  apply  to  all  the  articles  previously  men- 
tioned in  the  sub-section,  and,  therefore,  apply  to  the  products  of  the 
forest. 

Dictum  of  Hall,  J.,  in  Molsons  Bank  v.  Beaudry  (1901),  Q.R.  11  K.B.  212, 
approved. 

Semble,  that  sawn  lumber  is  a product  of  the  forest,  within  the  meaning  of 
the  sub-section. 

Held,  upon  the  evidence,  that  B.  was  a wholesale  dealer  in  lumber,  and,, 
therefore,  a person  from  whom  securities  upon  lumber  could  lawfully 
be  taken  by  the  bank,  under  the  sub-section. 

Held,  also,  upon  the  evidence,  that,  although  the  security  under  which  the 
bank  claimed  was  given  less  than  sixty  days  before  the  making  of  an 
assignment  by  B.  to  the  plaintiff  for  the  benefit  of  his  creditors,  it  was 
a continuation  of  a former  security  of  the  like  character  held  by  the 
bank  for  the  .indebtedness,  and  was  entitled  to  prevail  against  the 
assignment. 

Held,  also,  that  doors  and  window  sashes  and  the  like,  manufactured  from 
lumber  upon  which  the  bank  held  security,  were  products  of  the  lumber 
covered  by  the  securities. 

Some  of  the  lumber  covered  by  the  securities  was  used  by  B.  in  the  erection 
of  buildings:  — 

Held,  that,  so-  far  as  the  money  payable  under  the  building  contracts 
assigned  to  the  bank  represented  the  lumber  so  used,  the  bank  were 
entitled  to  it. 

Held,  also,  that  the  bank’s  claim  to  book-debts  assigned  by  B.  could  not 
prevail  against  the  assignment  to  the  plaintiff. 

The  plaintiff,  the  assignee  for  the  benefit  of  creditors  of 
Joseph  E.  Brethonr,  a builder,  contractor,  and  dealer  in  lum- 
ber, brought  this  action  to  set  aside  certain  securities  given  by 
Brethour  to  the  defendants  to  secure  his  indebtedness  to  them. 

June  14,  1911.  The  action  was  tried  before  Meredith,  C.J. 
C.P.,  without  a jury,  at  Toronto. 

W.  Laidlaw,  K.C.,  for  the  plaintiff. 

F.  Arnoldi,  K.C.,  for  the  defendants. 


1912 

April  IS 


April  18,  1912.  Meredith,  C.J. : — The  securities  which 
are  attacked  are  securities  taken  by  the  defendants  under  sec.. 


292 


ONTARIO  LAW  REPORTS. 


Meredith,  C.J. 

1912 

Townsend 

v. 

Northern 

Crown 

Bank. 


[VOL. 

90#  of  the  Bank  Act,  R.S.C.  1906,  ch.  29,  and  assignments  by 
Brethonr  of  moneys  payable  to  him  under  building  contracts 
which  he  had  entered  into,  and  book-debts,  and  these  securities 
were  given  within  sixty  days  before  the  making  of  the  assign- 
ment; and  the  plaintiff  attacks  them  on  several  grounds. 

The  securities  taken  under  sec.  90  of  the  Bank  Act  are 
attacked  on  two  grounds. 

It  was  contended  that  Brethour  was  not  a person  from 
whom  securities  upon  lumber  could  lawfully  be  taken, 
because,  as  is  said,  he  was  a builder,  and  not  a wholesale 
dealer  in  lumber.!  The  evidence  does  not  support  this  con- 
tention, but  shews  that  part  of  the  business  which  Brethour 
carried  on  was  that  of  a wholesale  dealer  in  lumber. 

It  also  contended  that  sawn  lumber  is  not  a product  of  the 
forest,  within  the  meaning  of  sec.  88. 

In  support  of  this  contention  Molsons  Bank  v.  Beaudry 
(1901),  Q.R.  11  K.B.  212,  was  cited.  The  opinion  of  the  Chief 
Justice  (Sir  Alexander  Lacoste)  in  that  case,  no  doubt,  sup- 
ports the  contention.  Hall,  J.,  however,  differed  from  the  Chief 
Justice,  and  the  other  member  of  the  Court  (Wurtele,  J.)  ex- 
pressed no  opinion  on  the  point.  The  question  was  not  neces- 
sary for  the  decision,  as  the  Court  was  unanimous  in  affirming 

*90.  The  bank  shall  not  acquire  or  hold  any  warehouse  receipt  or  bill 
of  lading,  or  any  such  security  as  aforesaid,  to  secure  the  payment  of  any 
bill,  note,  debt,  or  liability,  unless  such  bill,  note,  debt  or  liability  is  nego- 
tiated or  contracted, — 

(a)  at  the  time  of  the  acquisition  thereof  by  the  bank;  or, 

(b)  upon  the  written  promise  or  agreement  that  such  warehouse  receipt 
or  bill  of  lading  or  security  would  be  given  to  the  bank; 

Provided  that  such  bill,  note,  debt,  or  liability  may  be  renewed,  or  the 
time  for  the  payment  thereof  extended,  without  affecting  any  such  security. 

2.  The  bank  may, — 

(a)  On  shipment  of  any  goods,  wares  and  merchandise  for  which  it 
holds  a warehouse  receipt,  or  any  such  security  as  aforesaid,  surrender 
such  receipt  or  security  and  receive  a bill  of  lading  in  exchange  thereof ; or, 

(b)  on  the  receipt  of  any  goods,  wares  and  merchandise  for  which  it 
holds  a bill  of  lading,  or  any  such  security  as  aforesaid,  surrender  such  bill 
of  lading  or  security,  store  the  goods,  wares  and  merchandise,  and  take  a 
warehouse  receipt  therefor,  or  ship  the  goods,  wares  and  merchandise,  or 
part  of  them,  and  take  another  bill  of  lading  therefor. 

f Section  88,  sub-sec.  1,  of  the  Bank  Act,  B.S.C.  1906,  ch.  29,  provides: 
The  bank  may  lend  money  to  any  wholesale  purchaser  or  shipper  of  or 
dealer  in  products  of  agriculture,  the  forest,  quarry  and  mine,  or  the  sea, 
lakes  and  rivers,  or  to  any  wholesale  purchaser  or  shipper  of  or  dealer  in 
live  stock  or  dead  stock  and  the  products  thereof,  upon  the  security  of 
such  products,  or  of  such  live  or  dead  stock  and  the  products  thereof. 


XXVI.] 


ONTARIO  LAW  REPORTS. 


293 


on  other  grounds  the  judgment  that  had  been  given  against  the 
plaintiffs. 

The  provision  of  the  Bank  Act  then  under  consideration  was 
sub-sec.  2 of  sec.  74  of  53  Yict.  ch.  31,  which  reads  as  follows: 
“2.  The  bank  may  also  lend  money  to  any  wholesale  purchaser  or 
shipper  of  products  of  agriculture,  the  forest  and  mine,  or  the 
sea,  lakes  and  rivers,  or  to  any  wholesale  purchaser  or  shipper 
of  live  stock  or  dead  stock,  and  the  products  thereof,  upon  the 
security  of  such  products,  or  of  such  live  stock  or  dead  stock, 
and  the  products  thereof.”  That  sub-section  was  repealed  by 
sec.  17  of  63  & 64  Yict.  ch.  26,  and  re-enacted,  with  some  changes 
that  are  not  material  to  the  present  inquiry ; and  the  substituted 
sub-section  appears  in  R.S.C.  1906,  ch.  29,  as  sub-sec.  1 of  sec.  88. 


Meredith,  C.J. 

1912 

Townsend 

v. 

Northern 

Crown 

Bank. 


In  my  view,  the  construction  placed  by  Hall,  J.,  on  sec.  74, 
was  the  correct  one.  In  my  opinion,  the  words  “and  the  pro- 
ducts thereof,”  in  the  fourth  and  fifth  lines,  apply  to  all  the 
articles  previously  mentioned  in  the  sub-section,  and,  there- 
fore, to  the  products  of  the  forest,  and  the  words  “the 
products  thereof,  ’ ’ in  the  last  line,  apply  as  well  to  the  products 
mentioned  in  the  earlier  part  of  the  sub-section  as  to  the  pro- 
ducts of  live  stock  and  dead  stock. 

Being  of  this  opinion,  it  is  unnecessary  to  express  an  opin- 
ion as  to  whether  sawn  lumber  is  a product  of  the  forest,  within 
the  meaning  of  the  sub-section ; but  I am  inclined  to  think  that 
it  is. 

It  is  further  contended  that,  as  the  security  under  which  the 
defendants  claim  was  given  less  than  sixty  days  before  the  mak- 
ing of  the  assignment,  it  cannot  prevail  against  the  assignment. 
That  security  was,  however,  but  a continuation  of  a former 
security  of  the  like  character  held  by  the  defendants  for  the 
indebtedness;  and  this  contention,  therefore,  fails. 

Some  of  the  lumber  upon  which  the  defendants  held  security 
was  manufactured  into  doors  and  window  sashes  and  the  like, 
and  these  products  of  the  lumber  are  covered  by  the  securities : 
R.S.C.  1906,  ch.  29,  secs.  88,  89. 

None  of  the  other  articles  covered  by  the  securities  are  within 
sec.  88  of  the  Revised  Act;  and  the  securities  do  not,  therefore, 
extend  to  them. 


294 


ONTARIO  LAW  REPORTS. 


Meredith,  C.J. 

1912 

Townsend 

v. 

Northern 

Crown 

Bank. 


D.  C. 
1912 

April  18 


VOL. 


Some  of  the  lumber  covered  by  the  securities  was  used  by 
Brethour  in  the  erection  of  buildings;  and,  as  far  as  the  money 
payable  under  the  building  contracts  assigned  to  the  defendants 
represents  the  lumber  so  used,  they  are  entitled  to  it. 

The  claim  of  the  defendants  to  the  hook-debts  cannot  be 
supported;  and,  indeed,  according  to  my  recollection  of  what 
took  place  at  the  trial,  it  was  abandoned. 

If  the  parties  cannot  agree  as  to  it,  there  will  he  a reference 
to  the  Master  in  Ordinary  to  determine  what  part  of  Brethour ’s 
stock  in  trade  at  the  time  of  the  assignment,  not  being  lumber, 
was  the  product  of  lumber  covered  by  the  defendants7  securities, 
and  what  part,  if  any,  of  the  money  payable  under  the  building 
contracts  assigned  represented  lumber  or  the  products  of  lumber 
covered  by  those  securities. 

As  success  is  divided,  there  will  be  no  costs  to  either  party. 


[DIVISIONAL  COURT.] 


Re  Denton. 

Will — Construction — Gift  to  Brothers  and  Sisters — Death  of  Sister  between 
Date  of  Will  and  Death  of  Testator — Right  of  Children  of  Deceased 
Sister  as  Secondary  Legatees. 

Held,  reversing  the  judgment  of  Riddell,  J.,  25  O.L.R.  505,  upon  one  of  the 
questions  arising  upon  the  will,  that  the  children  of  the  sister  who  died 
before  the  testator,  but  after  the  date  of  the  will,  were  entitled  to  her 
share  of  the  “remainder”  under  clauses  7 and  8 of  the  will. 

Review  of  the  authorities. 

Appeal  by  J.  H.  Dickenson,  representative  of  Naomi  Dicken- 
son, deceased,  from  the  order  of  Riddell,  J.,  25  O.L.R.  505,  upon 
one  of  the  question  submitted  as  to  the  construction  of  the  will 
of  John  M.  Denton,  deceased. 


April  3.  The  appeal  was  heard  by  a Divisional  Court  com- 
posed of  Boyd,  C.,  Latchford  and  Middleton,  JJ. 

T.  G.  Meredith,  K.C.,  for  the  appellant.  The  question  for 
decision  arises  under  the  7th  and  8th  clauses  of  the  will,  and  is, 
whether  or  not  the  children  of  Naomi  Dickenson,  who  died  after 
the  date  of  the  will,  but  predeceased  the  testator,  are  entitled  to 
share  in  the  remainder  of  the  fund  formed  under  clause  7 — in 


XXVI.] 


ONTARIO  LAW  REPORTS. 


295 


other  words,  whether  the  gift  under  clause  8 is  substitutionary  D*  c- 
or  substantive.  The  learned  Judge  in  the  Court  below  held  that  1912 
the  gift  was  substitutionary  only,  and  accordingly  excluded  the  Re  Denton. 
children  of  Naomi,  considering  that  he  was  bound  by  the  prin- 
ciples and  authorities  cited  by  him,  although  the  contrary  view 
appeared  to  him  to  be  more  agreeable  to  common  sense.  The 
law  is  stated  in  Theobald  on  Wills,  7th  ed.,  p.  671,  and  it  is 
submitted  that  the  appellant’s  case  is  supported  by  the  principles 
there  laid  down,  which  are  not  affected  by  the  cases  cited  on 
behalf  of  the  respondents.  In  Thornhill  v.  Thornhill  (1819),  4 
Madd.  377,  relied  on  by  the  learned  Judge,  the  language  is  not 
the  same  as  here,  and  that  case  has  been  disapproved  of  in 
Smith  v.  Smith  (1837),  8 Sim.  353,  per  Shadwell,  V.-C.,  at  p. 

357.  In  re  Potter’ s Trust  (1869),  L.R.  8 Eq.  52,  which  the 
learned  Judge  says  is  explained  in  In  re  Hotchkiss’s  Trusts 
(1869),  L.R.  8 Eq.  643,  is  in  our  favour  and  is  good  law  to-day, 
and  the  appellant’s  case  is  even  stronger.  In  re  H annum, 

[1897]  2 Ch.  39,  has  been  referred  to  as  against  our  contention, 
but  falls  far  short  of  justifying  such  a conclusion.  [Middleton, 

J.,  referred  to  Re  Fleming  (1904),  7 O.L.R.  651.]  Re- 
ference was  made  to  Cort  v.  Winder  (1844),  1 Coll.  320, 
and  to  Loring  v.  Thomas  (1861),  1 Dr.  & Sm.  497,  where  Chris- 
topherson  v.  Naylor  (1816),  1 Mer.  320,  is  distinguished;  also 
to  In  re  Woolrich  (1879),  11  Ch.  D.  663.  The  appellant  relies 
on  Loring  v.  Thomas , which  has  never  been  disapproved,  as 
giving  the  principle  on  which  this  case  should  be  decided. 

M.  D.  Fraser,  K.C.,  for  the  beneficiaries  under  the  will  other 
than  Naomi  Dickenson,  relied  upon  the  judgment  of  Riddell, 

J.,  and  the  cases  there  cited,  and  the  principle  laid  down  in  the 
line  of  authorities  from  Christopher  son  v.  Naylor,  in  1816,  to  In 
re  Hannam,  in  1897,  as  shewing  that  where  the  gift  is,  as  here, 
by  way  of  substitution,  the  children  of  a person  predeceasing 
the  testator  are  excluded.  He  referred  to  Re  Fleming,  supra; 

Re  Williams  (1903),  5 O.L.R.  345;  In  re  Clark  (1904),  8 O.L.R. 

599.  In  re  Potter’s  Trust,  supra,  on  which  the  appellant  relies, 
cannot  be  treated  as  a binding  decision,  and  James,  V.-C.,  dis- 
cussing that  case  in  In  re  Hotchkiss’s  Trusts,  supra,  holds  that 
Christopher  son  v.  Naylor  is  still  an  authority.  It  may  be  ad- 


ONTARIO  LAW  REPORTS.  [vol. 

mitted  that  the  appellant’s  case  appeals  to  sympathetic  feeling, 
but  the  law  is  the  other  way. 

Joseph  Montgomery,  for  the  executor,  took  no  part  in  the 
argument,  but  stated  that  his  client  would  not  be  sorry  if  what 
had  been  called  the  “common  sense”  view  of  the  case  should 
prevail. 

Meredith,  in  reply,  argued  that  Loring  v.  Thomas  covered 
the  case,  and  had  not  been  overruled.  He  referred  to  In  re 
Metcalfe,  [1909]  1 'Ch.  424,  in  which  the  Loring  case  was 
followed. 

April  18.  Bovd,  C. : — The  7th  and  8th  clauses  of  the  will  are 
these : — 

(7)  After  the  death  of  my  wife  to  sell  property  and  pay  to 
sister  Naomi  and  to  Mary  $500  and  to  divide  the  remainder 
equally  amongst  all  my  brothers  and  sisters,  including  Naomi 
and  Mary. 

(8)  'Should  any  of  my  brothers  or  sisters  die  before  the  final 
division  of  my  estate  leaving  lawful  issue  then  and  in  such  case 
I desire  that  the  share  which  such  deceased  brother  or  sister 
would  have  been  entitled  (to)  if  living  shall  be  divided  equally 
amongst  the  children  of  such  deceased  brother  or  sister  so  that 
such  child  or  children  shall  take  the  portion  which  his  or  her  or 
their  parent  would  have  been  entitled  (to)  if  living. 

Upon  questions  submitted  to  the  Court  touching  the  proper 
construction  of  John  M.  Denton’s  will,  the  fifth  one  was  this: 
Are  the  children  of  Naomi  entitled  to  share,  under  the  provi- 
sions of  clause  8,  in  the  remainder  of  the  fund  formed  under 
clause  7 of  the  will  ? 

The  Judge’s  answer  is  that  these  children  are  excluded. 
From  this  the  present  appeal  is  lodged. 

The  important  dates  are  these.  The  will  of  the  testator  was 
dated  and  made  the  24th  June,  1889.  The  sister  of  the  testator, 
Naomi,  died  in  1892,  leaving  children.  The  testator  died  in 
1896.  His  widow  died  in  1910.  At  that  time  in  1910,  his  estate 
became  finally  divisible  upon  * the  death  of  the  life-tenant. 
Naomi  died  before  this  final  division;  she  also  died  before  the 
testator;  but  the  important  point  which  appears  to  have  been 


XXVI.] 


ONTARIO  LAW  REPORTS. 


297 


passed  by  unconsidered  is,  that  she  was  alive  at  the  date  of  c- 

the  will,  and  formed  then  one  of  the  class  capable  of  sharing  in  

the  residue,  when  it  should  fall  to  be  divided.  The  learned  Re  Denton. 
Judge,  applying  the  solvent  of  “common  sense,”  thought  the  Boyd.  c. 
testator  intended  to  benefit  the  children  of  Naomi,  but  was  com- 
pelled by  authority  to  decide  the  other  way.  But,  bearing  in 
mind  the  cardinal  fact  that  the  sister  was  alive  at  the  date  of 
the  will,  there  appears  to  be  comparative  concord  in  the  later 
case-law  in  favour  of  the  bequest  to  the  children  being  well  and 
legally  bestowed. 

Grant,  M.R.,  in  Christopherson  v.  Naylor,  1 Mer.  320 
(1816),  laid  down  the  proper  method  of  inquiry.  Who  are  the 
primary  legatees?  Who  are  capable  of  taking  in  the  first  place 
by  the  terms  of  the  will?  Having  found  these,  then  the  repre- 
sentatives or  issue  of  these  are  by  the  will  made  to  stand  as  sub- 
stitutes in  place  of  the  original  legatee  who  had  died.  Whether 
the  time  of  death  be  before  the  death  of  the  testator  or  the 
tenant  for  life  or  the  period  of  distribution  does  not  matter,  so 
long  as  you  find  the  primary  legatee  having  capacity  to  take 
named  in  the  will.  This  was  in  1816 : and  in  1843  an  accur- 
ate Judge  summarised  the  state  of  decision  on  this  point 
in  Gray  v.  Garman  (1843),  2 Hare  268:  “It  has,  indeed,  been 
made  a question,  whether  the  capacity  of  the  primary 
legatee  (at  the  date  of  the  will)  to  take  the  legacy  was  alone 
sufficient,  whether  such  legatee  must  not  survive  the  testator, 
become  a legatee  in  esse,  and  not  have  been  a legatee  in 
posse  only  to  entitle  his  issue  to  claim  in  substitution  . . . 

But  later  cases  appear  to  sanction  a more  liberal,  though  still  a 
literal,  construction  of  language  like  that  I am  considering.  And 
it  has  been  held,  that  the  issue  of  a person  primarily  pointed 
out  as  the  object  of  a testator’s  bounty,  and  living  at  the  date  of 
the  will,  may  take  in  substitution  for  that  party  dying  in  the 
lifetime  of  the  testator”  (citing  cases)  ; and  the  Vice-Chancellor 
(Wigram)  ends  by  saying — “A  construction  which  is  certainly 
fortified  by  very  important  analogies:”  p.  271. 

The  gloss  of  Sir  John  Romilly  in  Ive  v.  King  (1852),  16 
Beav.  46,  at  p.  53,  cited  in  the  judgment  below,  25  O.L.R.  at 
p.  511,  and  founded  upon  the  cases  he  refers  to,  appears  to  be 


298 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C.  too  wide:  as  Coulthurst  v.  Carter  (1852),  15  Beav.  421,  was  a 

case  where  the  parent  was  dead  at  the  date  of  the  will;  so  was 

Re  Denton.  Waugh  v.  Waugh  (1833),  2 My.  & K.  41;  and  so  was  Peel  v. 

Boyd,  c.  Cailoiv  (1838),  9 Sim.  372;  and  the  last  case  cited  by  the  Master 

of  the  Rolls,  Romilly,  Christopher  son  v.  Naylor,  I have  already 
referred  to  as  being  on  the  same  state  of  facts.  Congreve  v. 
Palmer  (1852),  16  Beav.  435,  was  in  like  manner  a case  where 
the  sister  was  dead  at  the  date  of  the  will,  and  had,  therefore, 
no  capacity  to  take  and  did  not  take  by  the  terms  of  the  will. 

In  re  Potter’s  Trust,  L.R.  8 Eq.  52,  is  quoted  in  the  judg- 
ment under  appeal,  and  'Malms,  V.-O.,  there  affirms  the  law  to 
be  on  reason  thus : ‘ ‘ Wherever  there  is  a gift  to  a class,  with  a 
gift  by  substitution  to  the  issue  or  children  of  those  who  shall 
die,  the  children  take  what  their  parents  would  have  taken  if 
living  at  the  testator’s  death,  without  regard  to  the  question 
whether  the  parents  died  before  or  after  the  date  of  tfye  will.” 
That  is  an  unquestioned  statement  of  law,  so  far  as  relates  to 
parents  dying  after  the  date  of  the  will,  but  it  has  provoked  con- 
troversy as  to  those  who  were  dead  at  the  date  of  the  will.  On 
this  head  it  seeks  to  controvert  Christopher  son  v.  Naylor,  but  on 
this  branch  of  the  inquiry  we  have  no  concern  in  order  to  dis- 
- pose  of  the  present  appeal.  The  controversy  is  raised  in  In  re 
Hotchkiss’s  Trusts,  L.R.  8 Eq.  643,  650:  but  the  case  itself  is  an 
express  decision  that  where  the  gift  is  to  a class  of  persons 
living  at  the  date  of  the  will,  the  children  of  those  who  died  be- 
tween the  date  of  the  will  and  the  testator  are  entitled. 

Thornhill  v.  Thornhill,  4 Madd.  377,  is  apparently  an  off- 
hand  decision  of  the  Vice-Chancellor,  who  had  the  reputation  of 
determining  without  hearing,  and  is  but  meagrely  reported. 
The  case  seems  to  have  turned  on  the  language  of  the  will  giv- 
ing the  children  the  share  of  the  parent ; and,  as  the  parent  died 
in  the  testator’s  lifetime,  he  never  had  a share  to  transmit  to  the 
children;  and  on  this  ground  it  may  be  supported,  and  it  is  so 
treated  by  Mr.  Theobald:  see  Theobald  on  Wills,  7th  ed.,  p.  671. 
And  he  distinguishes  it  from  cases  where  (as  in  the  present  will) 
what  is  given  to  the  issue  is  the  share  or  portion  which  a member 
of  the  class  would  have  taken  if  he  had  lived,  in  which  the  sub- 
stitution operates  as  regards  a person  who  dies  in  the  testator’s 


XXVI.] 


ONTARIO  LAW  REPORTS. 


299 


life  'but  who  was  alive  at  the  date  of  the  will.  Thornhill  v.  D. c- 

Thornhill  is  approved  and  followed  by  North,  J.,  in  In  re  Han-  1912 

nam,  [1897]  2 Ch.  39;  but  it  has  not  otherwise  been  received  Re  Denton. 
with  favour ; and  both  cases  are  any  way  clearly  distinguishable  Boyd.  c. 
from  this  case,  where  the  testator’s  language  expressly  provides 
for  the  case  of  one  dying  before  getting  or  being  entitled  to  any 
share  prior  to  the  final  distribution. 

The  point  is  thus  put  by  Kay,  J.,  in  In  re  Webster’s  Estate 
(1883),  23  Ch.  D.  737,  739:  “ Where  there  is  a gift  to  a class 
and  then  a substitutionary  gift  of  the  share  of  any  one  of  the 
class  who  should  die  in  the  lifetime  of  the  testator,  no  one  can 
take  under  the  substitutionary  gift  who  is  not  able  to  predicate 
that  his  parent  might  have  been  one  of  the  original  class,  and 
consequently  if  the  parent  was  dead  at  the  date  of  the  will, 
and  therefore  by  no  possibility  could  have  taken  as  one  of  the 
original  class,  his  issue  are  not  able  to  take  under  the  substitu- 
tionary gift.” 

But  I favour  the  construction  of  this  will  as  one  in  which  the 
gift  is  not  strictly  of  substitutionary  character,  but  as  present- 
ing two  classes  of  original  legatees:  one,  the  primary  legatees, 
the  brothers  and  sisters  of  the  testator  who  are  alive  at 
the  time  of  final  distribution  after  the  death  of  the  testator’s 
wife ; the  other,  the  secondary  legatees,  consisting  of  the  issue  or 
th'e  children  of  any  of  the  primary  legatees  who  may  die  leav- 
ing issue  before  the  period  of  final  distribution.  I would  adopt 
and  apply  the  language  of  Kindersley,  V.-C.,  as  used  in  Lan- 
phier  v.  Buck  (1865),  34  L.J.  Ch.  650,  656:  “The  gift  is  to 
two  classes  of  objects,  to  such  nephews  and  nieces  as  shall  be 
living  at  a given  time,  and  to  the  issue  of  such  nephews  and 
nieces  as  shall  be  dead  at  that  time.  Is  that  an  original  gift  to 
the  issue,  or  a gift  by  substitution?  Clearly  an  original  gift  to 
them.  It  is  true  you  may  say  in  a sense  they  are  substituted 
for  their  parents,  because  they  take  the  share  respectively 
among  them  which  their  parent  would,  if  he  had  come  under 
the  first  , class,  have  himself  taken,  and  in  that  sense  (but  that 
is  not  the  accurate  and  proper  sense)  you  may  say  that  there  is 
a substitution ; but  it  is  as  much  an  original  gift  to  the  issue  of 
such  of  the  nephews  and  nieces  as  shall  have  died  before  the 


300 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

He  Denton. 

Boyd,  0. 


tenant  for  life”  (or  the  period  of  distribution)  “as  it  is  an  orig- 
inal gift  to  such  of  the  nephews  and  nieces  as  shall  be  living  at 
the  death  of  the  tenant  for  life”  (or  other  fixed  period). 

I find  no  authority  preventing  us  from  giving  effect  to  the 
clear  and  obvious  meaning  of  the  testator,  that  the  children  of 
his  sister  should  take  the  share  intended  for  their  parent  had  she 
been  alive.  The  whole  field  of  testamentary  interpretation  in 
this  regard  has  been  broadened,  and,  if  I may  say  so,  humanised, 
by  the  exposition  of  the  subject  by  the  Lords  in  Barraclough  v. 
Cooper  (1905),  as  reported  in  a note  to  the  case  of  In  re  Lam- 
bert, [1908]  2 Ch.  117,  at  pp.  121-126.  They  repudiate  any 
canon  of  construction  beyond  the  fact  that  enough  is  found 
in  the  language  of  the  instrument  to  shew  what  was  the  mean- 
ing of  the  testator.  And  Lord  Macnaghten  quotes  with  emphatic 
approval  the  words  of  Vice-Chancellor  Kindersley  in  Loring  v. 
Thomas,  1 Dr.  & Sm.  510,  as  follows : ‘ ‘ Now,  of  course  the  ques- 
tion is  one  of  intention,  and  it  is  obvious  that  in  cases  of  this 
kind  a testator  may  mean  to  include  as  objects  of  his  bounty,  or 
he  may  mean  to  exclude,  the  issue  of  the  predeceased  children. 
When  a testator  directs  that  issue  shall  represent  or  stand  in  the 
place  of  or  be  substituted  for  a deceased  child,  and  take  the 
share  which  their  parent  would  have  taken  if  living,  he  may 
intend  such  representation  or  substitution  to  apply  only  to  the 
case  of  the  child  dying  subsequently  to  the  date  of  his  will  and 
before  the  time  of  his  own  death;  or  he  may  mean  it  to  extend 
also  to  the  case  of  the  child  who  was  already  dead  at  the  date 
of  the  will.  The  solution  of  the  question,  which  of  the  two  he 
intended,  must  of  course  depend  on  the  language  he  has  used 
in  indicating  such  representation  or  substitution.  He  may  use 
language  of  such  restricted  import  as  to  be  inapplicable  to  any 
children  but  such  as  are  living  at  the  date  of  the  will.  But  if 
he  uses  language  so  wide  and  general  as  to  be  no  less  applicable 
to  a predeceased  child  than  to  a child  living  at  the  date  of  the 
will,  then  the  direction  as  to  such  representation  or  substitution 
must  be  held  to  embrace  both.  ’ ’ 

The  House  of  Lords  have  in  effect  given  their  sanction  to 
the  vigorous  words  of  James,  V.-C.,  in  Habergham  v.  Ride- 
halgh  (1870),  L.R.  9 Eq.  395.  He  says  (p.  400)  : It  was  con- 


XXVI.] 


ONTARIO  LAW  REPORTS. 


301 


tended  by  Mr.  Kay  that  a gift  to  A.,  and  a class  of  persons,  is  H 0. 

also  a gift  to  a class,  and  that  with  regard  to  that  class  this  rule  

has  been  laid  down:  that  in  order  to  determine  the  class  you  Re  Dentox. 
must  take  the  persons  who  answer  the  description  at  the  death  Boyd,  c. 
of  the  testator.  That  implies  that  Where  there  is  a gift  to  a 
class,  that  means  a gift  to  such  of  the  class  as  shall  be  living  at 
the  death  of  the  testator;  and  it  follows  that  no  one  member 
of  the  class  who  may  have  died  in  the  lifetime  of  the  testator 
will  be  entitled.  That  reasoning  is  a very  good  illustration  of 
the  process  by  which  in  this  Court  we  have  established  a body  of 
dogma,  and  developed  a whole  code  of  artificial  rules,  according 
to  which  a testator's  will  is  treated  as  if  it  were  something 
written  in  cypher,  and  incapable  of  being  construed  except  by 
those  learned  persons  who  have  the  key  of  the  cypher.  Never- 
theless, sometimes  the  Court  is  enabled  to  determine  questions 
arising  upon  wills  according  to  the  rules  of  common  sense ; either 
by  playing  off  one  rule  against  another,  or  by  resorting  to  some 
general  rule  of  construction  which  controls  the  rest.”  And  the 
Vice-Chancellor  proceeds  to  act  accordingly. 

A case  of  Re  Fleming,  7 O.L.R.  651,  decided  by  Mr.  Justice 
Street,  supports  the  view  taken  on  this  appeal. 

I agree  with  my  ‘brother  Riddell  as  to  the  meaning  of  the 
testator;  and  I do  not  read  the  authorities  cited  as  going  to 
interfere  with  the  operation  of  common  sense  in  the  construc- 
tion of  the  testator’s  language. 

I rather  favour  giving  costs  of  this  appeal  out  of  the  estate. 

Latchford,  J. : — I agree. 

Middleton,  J. : — I entirely  agree.  Lindley,  L.  J.,  in  In  re 
Palmer,  [1893]  3 Ch.  369,  in  dealing  with  a case  where  the  Judge 
of  first  instance  had  thought  that  he  was  precluded  . by  prior  de- 
cisions from  giving  effect  to  the  testator’s  intention,  uses  words 
peculiarly  apt  here  (p.  373)  : “The  result  in  all  these  cases 
has  been,  in  my  opinion,  to  miss  the  intention  as  expressed,  and, 
unfortunately,  to  defeat  it  without  sufficient  grounds.  This  line 
of  cases  affords  a striking  illustration  of  the  mischief  done  by 
construing  one  will  by  paying  too  much  attention  to  decisions  on 


21 — XXVI.  O.L.R. 


*3  P O 

UvyU 

D.  C. 
1912 

Re  Denton. 

Middleton,  J. 


ONTARIO  LAW  REPORTS.  [voi, 

other  wills.  Rules  of  law  must  be  attended  to ; hut  if  in  any  case 
the  intention  of  a testator  is  expressed  with  sufficient  clearness 
to  enable  the  Court  to  ascertain  it,  the  Court  ought  to  give  effect 
to  it  in  that  case,  unless  here  is  some  law  which  compels  the 
'Court  to  ignore  it;  and  the  mere  fact  that  in  other  wills  more 
or  less  like  it  other  Judges  have  not  been  satisfied  as  to  the  inten- 
tions expressed  in  them,  is  not  sufficient  ground  for  defeating 
an  intention  where  the  Court  holds  it  to  be  sufficiently  expressed 
in  the  particular  will  which  it  is  called  upon  to  construe.” 

Quite  apart  from  cases,  the  language  of  the  testator  here  ad- 
mits of  no  possible  doubt.  The  testator  has  directed  the  pro- 
perty to  be  set  apart  and  held  during  the  lifetime  of  his  wife. 
Upon  the  death  of  the  wife,  it  is  then  to  be  divided  equally 
amongst  all  his  brothers  and  sisters,  including  Naomi  Dicken- 
son, who  is  expressly  named;' and  the  testator  then  provides  that, 
should  any  of  his  brothers  or  sisters  die  before  the  final  division 
of  his  estate,  leaving  lawful  issue,  the  share  which  the  deceased 
brother  or  sister  would  have  been  entitled  to,  if  living,  shall  go 
to  the  children  of  the  deceased  brother  or  sister. 

The  will  as  to  persons  speaks  from  its  date.  Naomi  died 
during  the  testator’s  lifetime.  I can  find  no  warrant  for  read- 
ing into  this  will  a provision  which  would  exclude  her  children 
from  sharing  because  she  predeceased  the  testator.  This  would 
be  clearly  contrary  to  the  express  intention  of  the  will.  The 
analysis  of  the  cases  by  my  Lord  makes  it  plain  that  there  is  no 
authority  compelling  us  to  do  violence  to  the  testator’s  language 
and  frustrate  his  intention. 

Appeal  allowed ; costs  out  of  the  estate. 


\ 


XXVI.] 


ONTARIO  LAW  REPORTS. 


303 


[DIVISIONAL  COURT.] 
Underwood  v.  Cox. 


Contract — Family  Settlement — Unfounded  Claims — Fraud  and  Misrepresen- 
tation— Inducement  for  Executing  Document — Threats — Absence  of  In- 
dependent Advice — Evidence — Threatening  Letter  Written  “without 
Prejudice ” pendente  Lite — Admissibility. 

The  defendant,  who  was  the  principal  beneficiary  under  the  will  of  her 
father,  made  an  agreement  with  the  plaintiffs,  her  brother  and  sister, 
and  with  another  sister,  by  which  she  covenanated  to  pay  over  to  them 
the  greater  part  of  what  she  was  to  receive  under  the  will.  One  of  the 
plaintiffs  had  opposed  the  granting  of  probate  of  the  will,  and  had  filed 
a caveat ; and  the  agreement  purported  to  be  by  way  of  compromise  or 
settlement  of  the  plaintiffs’  claims  to  the  estate:  — 

Held,  in  an  action  to  enforce  the  covenant,  that,  upon  the  evidence,  the 
plaintiffs  had  no  grounds  for  attacking  the  disposition  of  his  property 
made  by  the  father,  and  that  the  defendant  was  in  fact  induced,  by 
threats  made  by  her  brother,  one  of  the  plaintiffs,  to  execute  the  agree- 
ment, without  competent  independent  advice  and  under  pressure  of  the 
threats ; and,  therefore,  the  agreement  was  not  enforceable. 

A letter  written  to  the  defendant  by  her  brother  above-mentioned,  pendente 
lite,  and  containing  veiled  threats,  though  purporting  to  be  written 
“without  prejudice,”  was  admitted  as  evidence  for  the  defendant. 

Pirie  v.  Wyld  (1886),  11  O.R.  422,  followed. 

Judgment  of  Kelly,  J.,  reversed. 

Action  to  recover  $964.70  and  interest  upon  a covenant  in 
an  agreement. 

January  17,  18,  19,  and  26.  The  action  was  tried  before 
Kelly,  J.,  without  a jury,  at  Toronto. 

R.  TJ.  McPherson  and  J.  W.  McCullough , for  the  plaintiffs. 

O'.  Waldron , for  the  defendant. 

February  28.  Kelly,  J. : — This  action  is  brought  by  Wil- 
liam J.  Underwood  and  his  sister,  Catharine  Laurie,  against 
their  sister,  Jane  Cox,  for  payment  of  $964.70  and  interest, 
claimed  as  their  two-thirds  share  of  an  amount  agreed  by  the 
defendant  to  be  paid  to  the  plaintiffs  and  another  sister,  Mary 
Ann  Cox,  by  an  agreement  dated  the  5th  May,  1910. 

The  defence  set  up  is,  that  the  defendant  was  induced  to 
sign  the  agreement  by  the  misrepresentation,  fraud,  intimida- 
tion, duress,  and  undue  .influence  of  the  plaintiff  Underwood 
and  Joseph  Laurie,  husband  of  the  plaintiff  Laurie,  and  that 
she  signed  it  without  knowing  its  contents  and  without  legal 
advice  as  to  her  rights. 


D.  C. 
1912 

Feb.  28. 
April  18. 


304 


ONTARIO  LAW  REPORTS. 


[VOL. 


The  parties  to  the  agreement  are  children  of  Francis  Under- 
wood, deceased,  who  by  his  will,  dated  the  2nd  August,  1902,  and 
a codicil  thereto,  dated  the  1st  March,  1905,  gave  to  Ida  Frances 
Cox,  the  minor  daughter  of  the  defendant,  an  organ  and  a 
mortgage  which  he  held  for  $1,000  on  the  property  of  the  defen- 
dant and  her  husband,  and  all  the  rest  of  his  estate  to  the 
defendant. 

The  testator  died  on  the  27th  March,  1910 ; and  his  executors 
applied  for  probate  of  the  will;  the  plaintiffs  and  Mary  Ann 
Cox  filed  a caveat  against  the  issue  of  probate,  alleging  that 
the  will  was  not  executed  by  the  testator,  or,  if  so,  that  it  was 
executed  under  undue  influence  and  duress,  and  that  he  was  not 
of  sound  mind,  memory,  and  understanding. 


D.  C. 
1912 

Underwood 

v. 

Cox. 
Kelly,  J. 


The  real  ground,  however,  of  the  plaintiff  Underwood’s  ob- 
jection to  the  disposition  made  by  the  testator  of  his  estate  is 
found  in  the  claim  which  he  had,  or  believed  he  had,  against  the 
testator  and  his  estate,  arising  out  of  an  agreement  or  under- 
standing between  the  father  and  son.  Several  years  prior  to  his 
death,  the  father  obtained  from  the  son  a conveyance  of  certain 
property,  at  a price  much  less  than  its  real  value,  on  the  promise 
that,  at  his  death,  the  son  would  be  given  a substantial  part  of 
his  estate.  The  son  honestly  believed  that  he  was  entitled  to 
enforce  this  claim  against  his  father’s  estate,  or  to  share  in  the 
assets  of  the  estate ; he  also  claimed  the  organ  which  his  father 
bequeathed  to  the  defendant’s  minor  daughter,  and  which,  the 
evidence  shews,  had  been  at  some  time  looked  upon  as  belonging 
to  him.  The  claim  of  the  plaintiff  Catharine  Laurie  was,  that 
she  had  been  promised  by  her  father  consideration  for  having 
nursed  and  cared  for  him  for  a considerable  time  prior  to  his 
death,  and  that  the  estate  was,  therefore,  indebted  to  her.  Mary 
Ann  Cox,  the  other  party  to  the  agreement  sued  on,  is  not  a 
party  to  these  proceedings;  it  was  stated  by  the  defendant’s 
counsel,  during  the  progress  of  the  trial,  that  she  was  not  press- 
ing her  claim. 

On  the  4th  May,  1910,  the  plaintiff  Underwood,  who  lives  in 
London,  went  to  the  defendant’s  residence  in  the  township  of 
Markham,  and,  during  an  interview  of  considerable  length,  pro- 
posed a settlement.  The  defendant’s  husband,  Walter  Cox,  was 


XXVI.] 


ONTARIO  LAW  REPORTS. 


305 


not  present;  and  Underwood,  after  stating  to  the  defendant  why  L^C. 

he  claimed  to  be  entitled  to  a settlement,  named  an  amount  — _ 

which  would  be  accepted  for  the  plaintiffs  and  Mary  Ann  Cox  Underwood 
in  full,  the  terms  proposed  being  exactly  those  which  were  after-  Cox. 
wards  embodied  in  the  agreement  sued  upon.  The  defendant,  as  Keiiy,  j. 
was  natural,  said  that  she  wished  to  talk  it  over  with  her  hus- 
band; and  Underwood  left  the  house  with  the  understanding 
that  he  would  return  next  day  for  her  answer. 

On  the  5th  May,  Underwood,  accompanied  by  Joseph  Laurie, 
husband  of  the  plaintiff  Catharine  Laurie,  returned  to  the  de- 
fendant’s house,  and  had  a further  interview  with  the  defen- 
dant and  her  husband.  The  proposal  made  on  the  day  previous 
was  fully  and  freely  talked  over  and  considered  by  those  pre- 
sent, and  the  defendant  and  her  husband  decided  to  accept  it; 
and  it  was  suggested  by  the  defendant ’s  husband  that  the  plain- 
tiff Underwood  draw  the  agreement  to  carry  out  the  settlement. 

This  Underwood  refused  to  do.  It  was  then  suggested,  and,  so 
far  as  the  evidence  shews,  by  the  defendant,  that  Underwood, 

Walter  Cox,  and  Laurie  go  to  one  of  the  executors,  who  lived 
near  by,  and  have  him  draw  the  agreement.  They  went.  The 
executor  also  refused  to  draw  it,  and  suggested  the  parties  going 
to  Markham  to  have  it  drawn  by  a solicitor.  These  same  three 
persons  went  together  to  Markham,  a distance  of  five  and  a half 
miles,  and  instructions  were  given  to  a solicitor  to  prepare  the 
agreement,  on  the  terms  which  had  been  agreed  on  at  the  de- 
fendant ’s  house,  all  three  being  with  the  solicitor  when  the 
instructions  were  given. 

The  plaintiff  Underwood  and  the  defendant’s  husband  re- 
turned to  the  defendant’s  house  with  the  agreement,  which,  on 
the  way  from  the  solicitor’s  office,  had  been  signed  by  Mary 
Ann  Cox. 

The  defendant  did  not  then  read  the  agreement,  but  she 
admits  that  she  understood  the  proposal  for  settlement,  made 
by  her  brother  on  the  4th,  and  discussed  by  the  parties  as- 
sembled at  her  house  on  the  5th.  There  is  no  doubt,  and  the 
defendant  admits  it,  that  the  agreement  is  in  the  exact  terms 
then  proposed.  Under  these  circumstances,  its  not  having  been 
read  over  at  the  time  of  its  execution  is  not  a ground  for  re- 


306 

D.  C. 
1912 

Underwood 

v. 

Cox. 

Kelly,  J. 


ONTARIO  LAW  REPORTS.  [vol. 

pudiating  the  agreement:  North  British  B.W.  Co.  v.  Wood 
(1891),  18  Ct.  of  Sess.  Cas.  (4th  series)  27. 

The  defendant  shewed  some  hesitation  about  signing,  and  the 
plaintiff  Underwood  said  to  her:  “Now,  Jane,  you  do  not  need 
to  sign  that  paper,  and  don’t  sign  it  unless  you  feel  that  you  are 
giving  what  you  feel  that  I should  have;  I consider  this  is  a 
just  claim,  and  if  you  don’t  consider  so,  don’t  sign  that  paper.” 
And,  further,  “You  don’t  have  to  sign  it.” 

The  defendant’s  husband  then  said,  “What  will  happen  if 
she  don’t  sign  it?”  Underwood  replied,  “We  will  let  it  stand 
on  its  own  merits,  will  let  the  case  stand  on  its  own  merits,  and 
the  case  will  settle  itself.” 

At  the  trial  it  was  admitted  that  there  was  no  duress;  and 
there  was  no  evidence  of  it;  but  it  was  attempted  to  be  shewn 
that  there  was  fraud  and  misrepresentation  on  the  part  of  the 
plaintiff  Underwood,  and  that  he  had  intimidated  the  defen- 
dant and  obtained  undue  influence  over  her. 

The  evidence  does  not  satisfy  me  that  these  contentions  are 
well  founded.  I do  not  find  that  the  plaintiff  Underwood  or 
Joseph  Laurie  made  any  misrepresentations  to  or  perpetrated 
any  fraud  upon  the  defendant;  nor  do  I think  that  any  fidu- 
ciary relationship,  or  relationship  of  confidence,  existed  or  was 
established  between  these  parties  such  as  would  justify  the  as- 
sumption of  undue  influence;  nor  is  there  any  evidence  of  in- 
timidation. 

The  defendant  alleged  that  she  was  in  a weak  state  of  health, 
that  she  had  no  independent  advice,  and  that  she  was  unduly 
pressed  by  the  plaintiff  Underwood,  and  was  hastened  into  the 
settlement. 

It  is  true  that  she  was  not  then  in  the  best  of  health,  but  she 
was  not  so  unwell  as  not  to  be  able  to  attend  to  her  household 
duties,  which  she  was  doing  unaided  at  that  time,  including  the 
preparation  pf  dinner  for  those  who  assembled  at  her  house  on 
the  5th  May.  She  was  not  unduly  pressed  or  hurried  into  the 
settlement.  When,  on  the  4th  May,  she  expressed  her  desire  to 
be  given  until  the  following  day  to  consult  with  her  husband, 
her  brother  readily  consented.  She  had  from  some  time  on  the 
4th  May  until  the  afternoon  of  the  5th  May  to  confer  with  her 


XXVI.] 


ONTARIO  LAW  REPORTS. 


307 


husband,  and  obtain  other  independent  advice,  had  she  desired  to 
do  so;  and  I do  not  find  that  any  circumstances  arose  which 
threw  the  burden  on  the  plaintiffs  of  doing  more  than  they  did. 
See  Wallis  v.  Andrews  (1869),  16  Gr.  624,  at  p.  640. 

In  Harrison  v.  Guest  (1856),  2 Jur.  N.S.  911,  the  Lord 
Chancellor  held  the  absence  of  professional  advice  no  objection, 
when  the  party  dealt  with  did  not  occupy  a fiduciary  relation- 
ship. It  was  also  there  laid  down  that  the  burden  of  proof  is 
on  the  party  seeking  to  set  aside  the  transaction  to  shew  that  he 
has  been  imposed  on,  and  it  is  not  for  him  to  say,  “I  had  no  pro- 
fessional advice,”  unless  he  can  shew  that  there  has  been  con- 
trivance or  management  on  the  part  of  the  person  who  was 
dealing  with  him,  and  whose  transaction  is  sought  to  be  set  aside,, 
to  prevent  him  having  that  advice. 

Nothing  has  happened  in  this  case  to  throw  that  burden  on 
the  plaintiffs. 

The  defendant  endeavoured  to  shew  that  the  plaintiff  Under- 
wood had  used  an  incident  in  her  early  life  as  a threat  to  compel 
her  to  make  the  settlement.  I do  not  find  this  to  have  been  the 
fact.  The  defendant’s  evidence  is,  that  she  did  not  know  if  her 
brother  knew  of  this  incident,  that  he  had  never  mentioned 
it  to  her,  and  when  she  herself  mentioned  the  subject  on  the  4th 
May,  she  cannot  remember  his  making  any  reply.  Her  brother 
denies  having  alluded  to  it. 

It  was  argued  on  behalf  of  the  defendant  that  the  filing  of 
the  caveat  was  not  the  proper  procedure  by  which  Underwood 
could  establish  his  claim.  He,  however,  believed  that  whatever 
procedure  was  adopted  by  his  solicitor  in  London,  who  prepared 
the  caveat,  was  the  necessary  procedure  by  which  to  establish 
his  claim. 

The  settlement  was,  to  my  mind,  deliberately  made ; and  the 
fact  that  one  party  to  it  afterwards  became  dissatisfied  with  it, 
is  not  of  itself  a sufficient  reason  for  seeking  to  be  relieved  from 
it.  In  many  instances,  compromises  or  settlements  are  entered 
into  which  are  at  the  time  not  altogether  satisfactory  to  one  or 
other  of  the  parties,  but  which  they,  nevertheless,  enter  into  so 
as  to  avoid  the  expense  and  anxiety  attendant  on  litigation,  or 


D.  C. 
1912 

Underwood 


v. 

Cox. 


Kelly,  J. 


308 

D.  C. 
1912 

Underwood 

v. 

Cox. 

Kelly,  J. 


ONTARIO  LAW  REPORTS.  [vol. 

to  settle  doubtful  claims,  or  for  some  such  consideration,  and 
the  Courts  uphold  these  compromises  or  settlements. 

It  is  not  unusual  for  a compromise  to  be  effected  on  the 
ground  that  the  party  making  it  has  a chance  of  succeeding  in 
it ; and,  if  he  Iona  fide  believes  he  has  a fair  chance  of  success, 
he  has  a reasonable  ground  for  suing,  and  his  forbearance  to  sue 
will  constitute  a good  consideration:  Callisher  v.  Bischoffsheim 
(1870),  L.  R.  5 Q.B.  449;  Miles  v.  New  Zealand  Alford  Estate 
Co.  (1886),  32  Ch.D.  266. 

These  plaintiffs  not  only  believed  that  they  had  a chance  of 
success,  but  there  is  nothing  in  the  evidence  to  shew  that  their 
claims  were,  in  their  minds,  at  least,  other  than  honest  ones,  or 
that  they  were  otherwise  than  honestly  made.  By  the  agreement 
sued  upon,  they  and  Mary  Ann  Cox,  in  consideration  of  the  pay- 
ment which  the  defendant  agreed  to  make,  released  their 
father’s  estate  from  all  claims  which  they  had  against  it,  and 
withdrew,  without  costs,  the  caveat. 

After  a careful  consideration  of  the  evidence,  I can  only 
conclude  that  the  plaintiffs  are  entitled  to  succeed.  There  will, 
therefore,  be  judgment  in  their  favour  for  the  amount  prayed 
for  and  costs. 

The  defendant  appealed  from  the  judgment  of  Kelly,  J. 

April  4.  The  appeal  was  heard  by  a Divisional  Court  com- 
posed of  Boyd,  C.,  Latchford  and  Middleton,  JJ. 

G.  Waldron,  for  the  defendant,  argued  that  the  learned  trial 
Judge  erred  in  the  following  findings : that  the  plaintiff  Under- 
wood did  not  make  any  misrepresentation  to  the  defendant ; that 
his  real  ground  of  objection  to  the  will  was  in  the  claim  which 
he  had  against  his  father ’s  estate ; that  there  was  no  evidence 
of  intimidation ; that  no  fiduciary  relationship  or  relationship  of 
confidence  existed  between  these  parties  such  as  would  justify 
the  assumption  of  undue  influence;  that  the  defendant’s  health 
was  not  such  as  to  interfere  with  her  power  to  contract ; that  the 
absence  of  professional  advice  was  not  objectionable;  that  the 
plaintiff  Underwood  had  not  used  an  incident  in  the  early  life 
of  the  defendant  as  a threat  to  compel  her  to  make  a settlement ; 
that  the  agreement  was  deliberately  made ; that  the  plaintiffs 


XXVI.] 


ONTARIO  LAW  REPORTS. 


309 


believed  they  had  a fair  chance  of  success.  Counsel  contended,  U.  c- 

on  the  contrary,  that  there  was  fraud  and  overreaching  on  the  

part  of  the  plaintiff  Underwood;  that  there  was  a fiduciary  Underwood 

v. 

relationship  or  relationship  of  confidence  between  the  plaintiff  cox. 
Underwood  and  the  defendant;  that  there  was  evidence  of  in- 
timidation; that  the  plaintiff  Underwood  did  use  an  incident  in 
the  early  life  of  the  defendant  as  a threat  to  compel  her  to  make 
a settlement ; in  fine,  that  the  bargain  was  not  a compromise  of 
a dispute  at  all,  but  a surrender  by  the  defendant  through  fear 
of  Underwood’s  betrayal  of  a family  secret,  and  should  not  be 
enforced.  The  learned  trial  Judge  should  have  admitted  in 
evidence  a letter  written  by  the  plaintiff  Underwood  from  Lon- 
don in  November,  1911.  Though  written  “ without  prejudice,” 
it  was  not  a privileged  document,  because  it  contained  threats, 
and  was  not  written  for  the  purpose  of  a bona  fide  offer  of  com- 
promise : Kurtz  and  Co.  v.  Spence  and  Sons  (1888),  58  L.T.R. 

438,  at  p.  441;  Phipson  on  Evidence,  p.  211;  Pirie  v.  Wyld 
(1886),  11  O.R.  422.  In  support  of  his  contentions  counsel 
also  referred  to  the  following  authorities:  Cadaval  v.  Collins 
(1836),  4 A.  & E.  858;  Huguenin  v.  Baseley  (1807),  14  Ves.  273, 
at  p.  287 ; Gordon  v.  Gordon  (1816),  3 Swanst.  400;  Hoghton  v. 

Hogliton  (1852),  15  Beav.  278;  In  re  Roberts,  [1905]  1 Ch.  704; 

Tennent  v.  Tennents  (1870),  L.R.  2 Sc.  & D.  6-Hartopp  v.  Har- 
topp  (1856).,  21  Beav.  259;  Ellis  v.  Barker  (1871),  L.R.  7 Ch. 

104;  Boyse  v.  Bossborough  (1856),  6 H.L.  C.  2;  Allcord  v.  Skin- 
ner (1887),  36  Ch.  D.  145,  at  p.  171;  Stapilton  v.  Stapilton 
(1739),  1 Atk.  2;  McCaffrey  v.  McCaffrey  (1891),  18  A.R.  599; 

Trusts  and  Guarantee  Co.  v.  Hart  (1900),  31  O.R.  414,  at  p. 

420;  Gissing  v.  T.  Eaton  Co.  (1911),  25  O.L.R.  50. 

R.  TJ.  McPherson  and  J.  W.  McCullogh,  for  the  plaintiffs, 
contended  that  the  learned  trial  Judge  was  right  in  his  findings, 
and  that  his  judgment  should  be  affirmed.  They  denied  that  the 
evidence  shewed  any  fraud  or  overreaching  or  intimidation,  or 
that  any  fiduciary  relationship  existed  ^between  the  plaintiff 
Underwood  and  the-  defendant  such  as  would  justify  the  as- 
sumption of  undue  influence.  Therefore,  the  absence  of  profes- 
sional advice  was  no  objection:  Harrison  v.  Guest,  2 Jur.  N.S. 

911.  The  plaintiff  Underwood  did  not  use  an  incident  in  the 


310 


ONTARIO  LAW  REPORTS. 


[VOL. 


D-  C.  early  life  of  the  defendant  as  a threat  to  compel  her  to  make  a 

1912  settlement.  The  settlement  was  deliberately  made,  and  the  fact 

Underwood  that  one  party  afterwards  became  dissatisfied  with  it  was  not 

V. 

Cox.  a sufficient  reason  of  itself  to  he  relieved  from  it.  The  bargain 
was  a fair  compromise,  as  the  plaintiffs  believed  that  they  had 
a fair  chance  of  success : Callisher  v.  Bischoffsheim,  L.R.  5 Q.B. 
149;  Miles  v.  New  Zealand  Alford  Estate  Co.,  32  Ch.  D.  266. 
The  learned  trial  Judge  was  right  in  refusing  to  admit  in  evi- 
dence the  letter  of  November,  1911,  as  it  was  a privileged  com- 
munication : Kurtz  and  Co.  v.  Spence  and  Sons,  58  L.T.R.  438. 

Waldron,  in  reply. 


April  18.  Boyd,  C. : — This  appears  to  be  a nefarious  trans- 
action, though  its  real  import  was  obscured  at  the  trial  by 
reason  of  the  rejection  of  evidence.  Had  the  letter  written  by  the 
plaintiff  Underwood  to  the  defendant  pendente  lite  been  admitted 
and  considered  by  the  learned  trial  Judge,  I do  not  doubt  but 
that  he  would  have  arrived  at  a conclusion  diametrically  opposite 
to  that  now  under  appeal.  He  was  impressed  favourably  with  the 
appearance  of  the  plaintiff  Underwood,  but  his  own  letter  shews 
to  what  unworthy  means  he  will  stoop  to  serve  his  own  ends. 
The  dispute  falls  to  be  decided  (as  I take  it)  mainly,  if  not 
entirely,  on  what  occurred  during  the  firs!  interview  of  one 
hour  between  brother  and  sister  (the  said  parties)  on  the  4th 
May,  1910,  when  he  made  the  claim  which  was  afterwards 
given  legal  effect  to  by  the  writing  under  seal  which  is  the  foun- 
dation of  this  suit.  But  to  understand  the  situation  it  is  needful 
to  refer  to  what  is  in  evidence  and  to  the  prior  sequence  of 
events. 

The  first  group  relates  to  the  plaintiff  Underwood’s  claim 
of  unfair  treatment  by  his  father.  This  claim,  vague  at  best, 
looms  up  more  largely  at  the  trial  than  elsewhere.  It  was 
not  known  by  or*  disclosed  to  the  defendant;  and,  even 
now,  it  is  difficult  to  find  out  coherently  any  claim  from  the 
evidence.  But,  so  far  as  it  has  substance,  the  situation  is 
and  it  rests  entirely  on  the  recollection  and  good  faith 
credibility  of  the  plaintiff  Underwood — with  no  scrap  of  wr 
to  assist,  but  all  the  writings  making  against  him. 


XXVI.  ] 


ONTARIO  LAW  REPORTS. 


311 


The  lot  named  in  the  will,  N.  part  of  lot  18  (fifty  acres)  in  D-  c- 

the  4th  of  Scarborough,  was,  the  plaintiff  Underwood  says,  

originally  owned  by  his  mother.  She  died  in  1885,  without  a Undebwooh 
will,  leaving  the  father,  this  son,  and  four  sisters,  of  whom  the  Cox. 
youngest,  the  defendant,  Jane,  was  under  age.  It  is  said  that  Boyd>  c 
the  mother  intended  that  the  son  should  get  this  lot,  and  it  is 
said  that  the  father  got  the  sisters  to  sign  off  their  claims,  with- 
out consideration,  in  favour  of  the  plaintiff  Underwood.  It  is 
said  that  the  plaintiff  mortgaged  for  $500,  with  which  money  he 
went  into  business,  without  much  success  apparently.  Then 
the  father  asked  the  son  to  sell  him  the  lot,  and  the  son  wanted 
for  his  interest  therein  $3,500,  hut  the  father  would  give  no 
more  than  $2,000,  and  this  the  son  took,  on  the  father  saying 
that  the  son  would  get  a share  with  the  rest  of  them  when  he 
divided — this  being  taken  to  mean,  “when  he  died.”  The  son 
contradicts  himself  as  to  whether  the  father  paid  $2,000  and 
assumed  the  mortgage  for  $500,  or  whether  the  mortgage  was 
to  be  paid  out  of  the  $2,000.  This  occurred  in  1888.  This  man- 
ner of  claim  was  not  explained  to  the  sister  when  the  alleged 
settlement  took  place  in  1910.  He  gives  it  in  his  evidence  in 
chief  thus:  “I  said  I felt  I had  not  got  from  the  estate  what  I 
should  have  got,  that  my  father  had  not  left  me  what  I was 
promised,  what  I felt  I should  have;  she  said  she  had  nothing 
to  do  with  that  part  of  it  as  to  what  I got  or  should  have  got.” 

“Then  I asked  her,  in  view  of  the  circumstances,  her  knowing 
how  the  property  was  made  and  got  together,  and  how  I stayed 
at  home  till  I was  twenty-three,  I felt  it  was  due  her  to  make 
good  the  money,  as  she  was  evidently  the  only  beneficiary  under 
the  will,  that  I should  have  a certain  amount  and  that  Mary 
Ann  and  Catharine  should  have  something.” 

To  follow  the  history  of  this  lot  after  the  son  conveyed  to  the 
father.  In  1902,  the  father  called  upon  Mr.  Holmes  to  draw 
the  papers  conveying  this  lot  to  his  daughter  Jane  and  her 
husband,  Walter  Cox,  and  to  draw  a mortgage,  on  the  26th 
July,  1902,  for  $1,000,  upon  the  lot,  from  the  Coxes,  payable  to 
the  father  at  the  end  of  fourteen  years,  with  interest  at  two  and 
a half  per  cent.  This  was  subject  to  a first  mortgage  from  the 
father  to  George  Morgan  (probably  an  executor)  for  $1,500. 


312 


ONTARIO  LAW  REPORTS. 


[VOL. 


D.  C. 
1912 

Underwood 

v. 

Cox. 

Boyd,  C. 


Mr.  Holmes  says  that  the  mortgage  was  drawn  expressly  for  the 
purpose  of  being  left  to  the  child  (Ida  Prances).  According  to 
the  statement  of  the  plaintiff  Underwood,  this  farm  was  worth 
about  $5,000,  and  they  were  to  give  $4,750  for  it;  of  which 
$1,500  was  paid  by  the  defendant.  There  was  also  the  mortgage 
for  $1,000 ; and,  if  it  was  subject  to  another  mortgage  for  $1,500, 
that  would  total  $4,000.  And  the  plaintiff  omits  to  tell  that  his 
sister  Jane  relinquished  her  share  in  the  lot  originally  when  it 
was  conveyed  to  the  plaintiff — worth  several  hundred  dollars. 
The  rest  of  the  sisters  got  $2,500  each  from  the  father  during 
his  life. 


The  next  group  relates  to  the  will  of  the  father. 

The  father  died  at  the  home  of  the  plaintiff  Catharine 
Laurie,  on  the  27th  March,  1910.  His  will  weis  made  on  the  2nd 
August,  1902,  pursuant  to  instructions  given  to  the  well-known 
lawyer  Mr.  Holmes,  who  drew  it  and  was  one  of  the  subscribing 
witnesses.  He  gives  to  his  daughter  Mary  Ann  Cox  and  her 
husband  the  north  half  of  lot  19  in  the  4th  of  Scarborough,  being 
100  acres.  To  his  daughter  Fanny  Newell,  a small  lot  contain- 
ing one-eighth  of  an  acre  alongside  the  north  fifty  acres  of  lot 
18,  conveyed  to  Jane  and  her  husband.  To  Prances  Cox, 
daughter  of  his  daughter  Jane,  he  gives  the  organ  and  also  the 
mortgage  for  $1,000  made  by  his  daughter  Jane  to  the  testator, 
and  drawn  less  than  a week  before  the  will. 

Nothing  is  given  to  his  son  Richard  and  daughter  Catharine, 
as  he  had  advanced  them  a sufficient  portion  (the  plaintiff  Un- 
derwood’s name  is  not  mentioned),  and  the  residue  of  the  estate 
goes  to  Jane  Cox. 

There  was  a codicil  to  this,  drawn  after  it  because  of  the 
death  of  Fanny  Newell  on  the  1st  March,  1905,  when  the  testa- 
tor was  living  with  his  daughter  Catharine,  whereby  the  small 
lot  of  one-eighth  of  an  acre  was  given  to  his  daughter  Jane, 
the  defendant.  This  codicil  was  drawn  by  Mr.  Holmes’s  partner, 
Mr.  Gregory,  and  by  him  also  witnessed.  The  defendant  was 
too  ill  to  attend  the  funeral,  but  the  plaintiff  Underwood  was 
there,  and  then  found  out  from  the  Lauries  that  a will  had  been 
made.  The  matter  was  talked  over  with  the.  sister  Catharine, 
and  they  were  disturbed  about  the  way  the  property  was  left, 


XXVI.] 


ONTARIO  LAW  REPORTS. 


313 


•and  about  Ida  the  little  girl  securing  the  mortgage  for  $1,000.  D-  c- 

1912 

The  plaintiff  bespoke  a copy  of  the  will,  and  returned  to  his  home  

at  London.  He  writes  a letter  on  the  24th  April,  1910,  to  the  Underwood 

V. 

executor  George  Morgan  urging  the  forthcoming  of  a copy  of  the  Cox. 
will,  in  which  he  says  : 4 ‘ All  the  information  I have  is  from  the  BoydTa 
Lauries  to  the  effect  the  youngest  girl  (i.e.,  defendant)  in  the 
family  and  her  daughter  comes  in  for  the  entire  estate.  And  it 
is  my  opinion  (sic)  to  go  thoroughly  into  the  matter  before 
allowing  the  matter  to  be  settled.” 

The  plaintiff  repairs  to  Mr.  Beattie,  solicitor  in  London, 
and  procures  the  filing  of  a caveat  on  the  26th  April,  1910,  on 
behalf  of  the  plaintiff  and  the  two  sisters  Mary  and  Catharine. 

It  is  not  clear  what  he  told  this  solicitor  as  to  the  grounds  of 
attack ; at  p.  122  of  the  evidence  he  says : ‘ ‘ One  of  the  grounds  was 
his  own  promise  before  a witness  that  I was  to  have  a share  in  the 
estate.”  And  there  is  this  further  from  his  examination  for 
discovery:  “Q.  And  your  solicitor  did  not  think  that  would  be 
a ground  for  setting  aside  the  will?  A.  I do  not  think  I asked 
him  that.  I thought  possibly  that  would  be  a ground  for  setting 
aside  the  will  ...  I 'did  not  go  into  the  question  of  my  rea- 
sons for  the  caveat  to  J ane.  ’ 9 However,  the